Ministers in the OPEC/non-OPEC coalition are considering various options to extend their crude oil output cut deal, including an additional 1% reduction in supplies and a continuation of the deal through the end of 2018, Iraq's oil minister said at a conference Tuesday.
But no firm decisions have yet been reached, Jabbar al-Luaibi told delegates at the Gulf Intelligence Energy Markets Forum in Fujairah, adding on the sidelines that he personally did not see the need for further cuts but would support any OPEC consensus on the issue.
It would be "premature" to make any changes to the agreement, seven months before its March expiry, he said.
"Things are going OK. Compliance is about 80% in some case, maybe 73% in other cases," Luaibi said. "This is expected. We sense the improvement in the market. It is better than last year."
The agreement, which went into force January 1, calls on OPEC and 10 non-OPEC producers, led by Russia, to cut a combined 1.8 million b/d in output through March 2018 in order to rebalance the market and induce draws of oil from storage.
The Joint Ministerial Monitoring Committee overseeing the deal, consisting of ministers from Kuwait, Russia, Venezuela, Algeria and Oman, will meet Friday in Vienna to assess compliance and review market conditions, including the impact of hurricanes Harvey and Irma.
Representatives from Nigeria and Libya, both of which are exempt from the cuts as the nations' recover from civil unrest, will also attend to provide their production outlooks.
No decisions on the cuts are expected at the meeting, with OPEC sources having said that any changes to the agreement likely will not be voted on until the bloc's next full summit on November 30.
"This is a routine meeting of the JMMC," one OPEC delegate told S&P Global Platts.
OPEC's total crude oil output fell in August for the first time in five months to 32.65 million b/d, down 170,000 b/d from June, according to the latest Platts OPEC survey, which is one of six secondary sources used by the organization to monitor production.
The fall in output came as outages in Libya interrupted the country's recent dramatic recovery, more than offsetting gains in Nigeria.
IRAQ COMPLIANCE
In his comments, Luaibi denied that Iraq was not meeting its obligations under the deal, saying it was fully compliant and has in fact exceeded its share of cuts.
He said Iraq's current output was 4.325 million b/d, compared with 4.565 million b/d before the output cut became effective in January. The country, OPEC's second-largest producer, has a quota under the deal of 4.351 million b/d.
OPEC's secondary sources have Iraq's production much higher. Taken as an average, OPEC's six secondary sources pegged Iraq's August output at 4.45 million b/d, according to the latest OPEC Monthly Oil Market Report.
"We have exceeded our [output cut] share of 210,000 b/d. We have cut around 260,000 b/d, if we include the KRG [Kurdistan Regional Government]," Luaibi said on the sidelines of the conference.
"There are some secondary sources that point at Iraq, but this is completely wrong and not accepted. We have strict instructions from our prime minister, in the interests of our country and the market."
He added that Iraq was committed to upholding the deal.
"We need revenue [to fight Islamic State militants] but that does not mean that we will cheat [on our quota]," Luaibi said.
