Iraq will participate in OPEC oil-production cuts, al-Abadi says

Iraq, the second-largest oil producer in OPEC, will shoulder part of the burden of output cuts outlined by the group in September, Prime Minister Haider Al-Abadi said.

“Iraq will cut its output to preserve prices,” Al-Abadi told reporters in Baghdad on Wednesday. The country wants OPEC to reduce production by a total of 900,000 barrels a day when it meets next week in Vienna because the crude-market rout is hurting global investment in the industry, the premier said.

Iraq had previously resisted calls from fellow members of the Organization of Petroleum Exporting Countries to curb output, citing the urgency of its offensive against Islamic State. The group agreed to a collective production cut of between 32.5 million and 33 million barrels a day in September, saying it would work out individual quotas before its Nov. 30 summit.

Saudi Arabia, OPEC’s largest producer, has expressed optimism that consensus can be reached to cut supply, though oil prices have been volatile amid speculation that exemptions granted to key countries could thwart a deal.

Benchmark Brent crude traded down 0.3 percent at $48.99 a barrel at 4:01 p.m. in London on Wednesday. Prices remain less than half their level in mid-2014 amid a persistent oversupply.

A $1 increase in the price of oil boosts Iraq’s revenues by $1 billion a year, Al-Abadi said. “If OPEC cuts down output at 1 million barrels a day, this will help prices to go up and Iraq will make gains from this,” he said.