OPEC Output Drops in October as Kurdistan Tensions Weigh on Iraq

OPEC Output Drops in October as Kurdistan Tensions Weigh on Iraq

Tensions in Iraq between the semi-autonomous northern region of Kurdistan and the central government in Baghdad weighed on OPEC’s production last month.

The Organization of Petroleum Exporting Countries pumped 180,000 barrels a day less in October than September, with overall output dipping to 32.59 million barrels a day, according to a Bloomberg News survey of analysts, oil companies and ship-tracking data.

Production in Iraq, which saw tensions flare up following a referendum on independence in the semi-autonomous region of Kurdistan, dropped the most among OPEC nations. Operations were suspended at some crucial Kirkuk fields in the north of the country, an oil-rich region claimed by both the Kurds and the federal government.

Iraq, the organization’s second-biggest producer, saw its daily output fall by 120,000 barrels a day to 4.35 million barrels. At that level of production, Iraq is for the first time 100 percent compliant with its target under the OPEC deal that started on Jan. 1.

The tensions in Iraq have contributed to a rally in oil prices, with benchmark Brent topping $60 a barrel last month for the first time since July 2015.

The compliance rate of the 12 members who agreed to curb their supply increased to 104 percent in October from 82 percent the month before, the survey showed. OPEC members Nigeria and Libya are exempt from making cuts.

Oil ministers from OPEC countries as well as non-OPEC allies including Russia are meeting on Nov. 30 in Vienna to decide whether to extend a deal to curb production beyond the end of March. That move is supported by OPEC’s biggest producer Saudi Arabia, with Crown Prince Mohammed bin Salman saying last week he backed such an option. 

Saudi Arabia pumped 10.01 million barrels a day last month, little-changed from September, the survey showed.