Iraq, UAE and Kazakhstan declared commitment to cut oil production

Along with the United Arab Emirates and Kazakhstan, Iraq has declared commitment to a global pact to cut crude oil output at a meeting with industry officials in Abu Dhabi.

The Organisation of Petroleum Exporting Countries (OPEC) said, “The three countries, which have lagged in their implementation of a deal to cut production, all expressed their full support for the system to monitor the cutbacks in order to achieve the gload reaching full conformity.”

Talks co-chaired by Kuwait and Russia were scheduled after several nations faltered in their pledges to reduce output. Twenty-four producers, from among the OPEC and beyond, agreed to cut production late last year in a bid to end a global glut. Oil prices have lost 8 per cent this year on concern the agreement is failing to drain the world’s bloated oil stockpiles. Saudi Arabian Energy Minister Khalid al-Falih promised last month to intensify pressure on cheating countries.

According to two sources close to the confidential discussions who asked not to be identified, Iraq and the U.A.E. said at the meeting that OPEC’s estimates of their production - based on data from external sources - were at fault for any apparent failures to comply.

Iraqi compliance slumped to 29 percent in June, its lowest so far, while the U.A.E. made just 60 per cent of its cuts, according to data from the International Energy Agency. Iraq has complained that the estimates OPEC uses to monitor compliance are inaccurate, and that it has actually made the full reduction required.

Kazakhstan, rather than reduce its output as promised, has steadily increased it, with the expansion of its Kashagan oilfield. The agreement, which came into effect at the start of the year, brings together OPEC and non-OPEC nations in an effort to take as much as 1.8 million barrels of oil a day off the market.

Russia and Kuwait are two of the five nations that sit on the board that oversees the implementation of supply curbs. Saudi Arabia, which currently holds OPEC’s rotating presidency, also attended the meeting. The panel’s conclusions will be discussed when the full technical committee next meets, on August 21 in Vienna, OPEC said.