Iraqi Oil Minister Says Oil Prices Are Too Low
Current crude oil prices are "too low", Iraq's oil minister Adel Abdul-Mahdi said Sunday, expressing hopes that they could have bottomed out.
Iraq, a member of the Organization of the Petroleum Exporting Countries, has been pumping oil furiously to shore up a budget strained by low prices and a war with Islamic State.
Iraq's output in 2015 has jumped by almost 500,000 barrels making it--along with the U.S.--one of the world's two fastest sources of supply growth and a key driver of surging OPEC production, according to the International Energy Agency.
The minister's comments come after OPEC failed to reach any agreement to restrain production earlier this month, leaving members to continue pumping crude at near-record levels into an already over supplied market. The group abandoned its production ceiling of 30 million barrels a day, which it had breached routinely.
The Saudi Arabia-led policy is meant to cause a period of low prices that drives out producers thought to need high prices, such as U.S. production, thereby reducing supplies and increasing OPEC's share of the market and eventually causing a market correction. The strategy has taken longer to work than some OPEC officials initially thought, though the International Energy Agency said there were signs of success.
However, Saudi Arabia, OPEC's kingpin, and its Persian Gulf allies are willing to pull back oil output to boost oil prices but won't cut unless other producers such as Iran, Iraq and Russia join them, Gulf officials have said.
Mr. Abdul-Mahdi did not say on Sunday whether Iraq would cut its production to support prices but said "there are pressures on OPEC and Arab countries to take the initiative of cutting production so other countries outside the organization to claim a bigger share of the market."