Iraqi crude oil exports swell OPEC production volume

OPEC's Recent Crude Production, Quotas[24207 bytes] Total Organization of Petroleum Exporting Countries crude oil production averaged 26.55 million b/d in January, a rise of 390,000 b/d from December. Middle East Economic Survey (MEES) attributed the rise largely to the return of Iraq to international oil exporting, under an oil-for-humanitarian aid agreement with United Nations (OGJ, Dec. 16, 1996, p. 21). MEES estimated that Iraqi exports under the agreemeent reached 520,000 b/d in

Feb. 24, 1997

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OPEC's Recent Crude Production, Quotas[24207 bytes]

Total Organization of Petroleum Exporting Countries crude oil production averaged 26.55 million b/d in January, a rise of 390,000 b/d from December.

Middle East Economic Survey (MEES) attributed the rise largely to the return of Iraq to international oil exporting, under an oil-for-humanitarian aid agreement with United Nations (OGJ, Dec. 16, 1996, p. 21).

MEES estimated that Iraqi exports under the agreemeent reached 520,000 b/d in January, while the country produced a further 580,000 b/d for domestic consumption and export to Jordan.

While Iran's erratic production was boosted by 105,000 b/d on the month to average 3.705 million b/d in January, the main quota violators were once again Venezuela, Nigeria, and Qatar, according to MEES (see table).

Even Saudi Arabia registered an uncharacteristic rise in output, although only 5,000 b/d. MEES said the decision of the kingdom and its Persian Gulf allies to refrain from retaliation against quotabusters is underpinning the market.

MEES also shares the view expressed by UBS Ltd., London, recently that OPEC is no longer flexible enough to cope with an oversupplied market and falling prices (OGJ, Feb. 3, 1997, Newsletter).

"OPEC's quota system has become virtually fossilized," said MEES, "and quite useless as a tool for regulating supply in line with expected demand. Moreover, most OPEC producers are now acting exactly like non-OPEC suppliers, that is by expanding capacity as fast as they can and utilizing it to the full."