Iraq's new oil minister Hayan Abdulghani reiterated on Saturday Opec members' commitment to their production quotas through the end of 2023, seemingly walking back comments by the country's prime minister last month that Iraq would push to have its quota revised.
"Member states of the organization are committed to production rates and to the…quantities of cuts scheduled until the end of 2023," Abdulghani said after a virtual meeting of Opec ministers.
Ministers of the full Opec+ alliance, which brings together Opec producers and 10 other non-Opec partners including Russia, will meet online today at 13:00 Vienna time (12:00 GMT).
The Opec+ meeting will "involve a review of developments in the oil market and the challenges facing producers, and the reaffirmation of the decision [taken at the last meeting] to reduce production to the prescribed quantities to achieve more stability and balance for the market," the minister said.
Abdulghani's comments will have come as a welcome relief to Saudi Arabia and other Opec members after Iraq's recently elected prime minister Mohammed Shia al-Sudani said in mid-November that he wanted a review of the country's Opec+ production quota just weeks after Baghdad committed to it at the last Opec+ meeting in early October.
Such requests can run the risk of disrupting unity within Opec+, and need careful managing by the group.
The comments also confirm Argus reporting on 25 November that Iraq had shelved its plans to push a revision of its production quota at this meeting.
At its October meeting, Opec+ ministers agreed to lower the group's overall production ceiling by 2mn b/d from November through until the end of 2023.
And although some delegates have said that a further cut to quotas for early next year could be considered when the ministers meet later today, it appears that Opec+ countries are coalescing around a decision to keep production policy unchanged, and targets steady at November-December levels, largely because of the many uncertainties that still exist both on the demand and supply sides of the equation going into next year.
A key source of uncertainty stems from the as yet unclear impact that the EU embargo on seaborne Russian crude imports that goes into force on 5 December will have on supplies. The G7 agreed on 2 December to set the initial level for its price cap on sales of Russian seaborne crude to third-party countries at $60/bl.
Weak economic data from China has also been a point of concern with respect to oil demand, which, along with central bank actions to combat inflation has put downward pressure on the oil price in recent weeks, effectively wiping out most, of not all, of the price gains triggered by the Opec+ group's October decision to lower output targets.
The EU's prolonged struggle to agree on the exact level of the Russian oil price cap, and a sense in the market that its impact on supply may be limited, also contributed to the price slide.
Front month Ice Brent futures closed at just above $85/bl on 2 December, down from as high as $97/bl in early November.
