International

Iraq Gets Serious on Oil Cuts By Asking Buyers to Forgo Cargoes

Published on : 2020-06-12

Iraq has asked some Asia refiners to consider forgoing prompt shipments of its Basrah crude, a potential signal the country is trying to meet the output-cut pledges it made to OPEC at the weekend.

State-owned marketer SOMO sent requests to several customers asking if they would consider not taking some contracted cargoes for June and July loading, said people with knowledge of the matter. At least one buyer was unwilling to forgo shipments citing downstream commitments, while another will likely agree and seek replacement cargoes in the spot market, the people said.

Suppliers such as Iraq and Nigeria that have traditionally been lax at complying with output curbs are coming under increased scrutiny following the latest OPEC+ agreement. The alliance agreed to extend record output cuts for another month on condition that Baghdad doubles down on efforts to rein in production and also makes up for previous non-compliance.

Nobody responded to emails and text messages sent to SOMO seeking comment. The company typically sells two grades -- Basrah Light and Basrah Heavy -- to Asian customers in 1 million or 2 million-barrel shipments.

Efforts by OPEC+ and involuntary supply cuts in the U.S. have been instrumental in helping oil prices recover from virus-induced lows in April. However, there’s speculation the rally could be stymied as the speed of the rebound entices producers to raise output before demand fully recovers.

Iraq will be fully committed to the OPEC+ agreement, the country’s oil ministry said in a statement. The nation produced 4.2 million barrels a day in May, about 15% more than it was meant to under the previous OPEC+ deal struck in April. Iraq is set to release its official selling prices for July-loading crude exports in the coming days. Earlier, Saudi Aramco hiked official selling prices for all grades in a move that shocked buyers across Asia.

Related Articles

The 6th Middle East Instrumentation, Cybersecurity & Automation EXPO Concludes Successfully in Abu Dhabi

The 6th edition of the Middle East Instrumentation, Cybersecurity & Automation EXPO (MEICA EXPO 2025) concluded today at the prestigious Rixos Marina Abu Dhabi, marking three days of groundbreaking discussions, immersive exercises, and transformative insights into the future of industrial operations.

Read More

COMEX 2025 – Oman’s Tech Exhibition Goes Global with Five Future-Ready Ecosystems

Omani Tech Exhibition Comex 2025 Goes Global with Five Future-Ready Ecosystems through smart eGovernment initiatives and accelerating fintech innovation

Read More

COMEX Signs Strategic MoU with Oman’s Unified Promotional Identity Office to Fuse Innovation with National Identity

The MoU was signed today by Mr. Amr Abdullah Baabood, CEO of ARB, and His Excellency Dr. Fares bin Turki Al Said, Acting Director of the Unified Promotional Identity Office.

Read More
EnppipetrojetSCHNEIDER-ELECTRIChempleEgypt gasNorthSKY CTS exxonmobilhttps://www.shell.com/CPCADESSLBTam oilfieldIPR energy groupEthydcoHarbour EnergyVaalco EnergyUEE