Iraq joined the United Arab Emirates, Qatar and Oman in calling for OPEC and allied producers to stick with their agreement to cut oil output until the end of the year, despite recent price gains.
Output cuts by the Organization of Petroleum Exporting Countries and fellow producers have contributed to stability in the oil market, and Iraq supports OPEC’s decision to keep the caps in place, Oil Minister Jabbar al-Luaibi said at a conference in Abu Dhabi. OPEC’s agreement with other suppliers in November to rein in output until the end of 2018 helped lift Brent crude briefly above $70 a barrel last week.
“There are some sources here and there indicating that the market is flourishing now, the prices are healthy, so let’s talk about terminating the freeze,” al-Luaibi said on Saturday. “This is the wrong judgment, and we don’t agree with such a concept.”
The United Arab Emirates foresees no big changes in OPEC’s policy to result from short-term price fluctuations, U.A.E. Energy Minister Suhail Al Mazrouei said at the same event. Qatar Energy Minister Mohammed bin Saleh Al Sada told the official Qatar News Agency that the group should only review its cuts accord once crude stockpiles return to a five-year historical average.
Brent crude rose as high as $70.05 a barrel on Thursday before paring gains, and the international benchmark added 0.6 percent on Friday to end the week at $69.87 a barrel in London, the highest closing price since since December 2014. Prices are holding gains after a second yearly advance as OPEC and allies including Russia and Oman trim supply to clear a glut.
“We hope the whole dynamic will continue throughout 2018,” Iraq’s al-Luaibi said. “The deal should continue. The market now is stabilizing somehow but it’s not yet stable.”
Iraq said repeatedly last year that it should have been exempt from the oil cuts as it worked to rebuild its war-torn economy. It lagged behind fellow OPEC members in paring output for much of 2017 and didn’t comply fully with its pledged cuts until October, when fighting with the Kurds brought production down to within limits in the OPEC deal.
The U.A.E.’s Al Mazrouei acknowledged last week’s price increase but said producers must focus on longer-term, quarterly changes. “I don’t believe if we see that the price goes to $69 or approaches $70 we need to meet or panic,” he said.
Maintaining the cuts is OPEC’s consensus view, but some members, notably Iran, are concerned about spurring a renewed push from U.S. shale producers. While U.S. output slid last week, the Energy Information Administration has forecast production will rise above 10 million barrels a day as soon as next month.
Oman, the biggest Arab producer outside of OPEC that joined the group’s cuts, said it’s too soon to even discuss winding down the reductions before the end of the year, despite concerns of a possible shale oil surge.
“It’s absolutely crazy, for all of us, to increase production by 10 percent and to lose revenue by 40 percent, and this is what we did in 2014,” Oil Minister Mohammed Al Rumhy said Saturday in an interview with Bloomberg television in Abu Dhabi.