Low crude pricing is continuing for quite some time now, impacting not only companies but economies at large. This is being echoed by a sharply falling rig count in the domestic space as reported by Houston-based oilfield services company Baker Hughes Inc. (BHI – Analyst Report) in its weekly rig count. Also, Janet Yellen’s dovish stance has kept skepticism alive on the feasibility of any domestic growth.

However in sharp contrast, as per a report by independent oil and gas consultant Rystad Energy, Iraq’s crude oil production is set to increase in 2016. According to the agency, Iraq’s crude output levels are expected to follow the growth trajectory of 2015, when production increased 12% year over year. Some of the foremost energy companies like Exxon Mobil Corporation (XOM – Analyst Report), CNOOC Ltd. (CEO – Analyst Report), Eni SpA (E – Analyst Report), Royal Dutch Shell plc (RDS-A – Analyst Report), and BP p.l.c. (BP – Analyst Report) operate in the region.

This trend is the worst for energy players which have been hit hard by beleaguered crude fortunes. Oil price got another jolt after Saudi Arabia’s crown prince Mohammed bin Salman said that the kingdom might agree to a production freeze only “if all countries” including Iran agree to limit production to Jan 2016 levels. This has led to doubts over the validity of the oil producers’ meeting in Doha Apr 17.

Crude Pricing War Too Costly for Iraq?

The Organization of the Petroleum Exporting Countries (“OPEC”) has been consistently increasing production despite pricing woes. Per a survey by Reuters, supply from OPEC rose in Mar 2016 to 32.47 million barrels per day (bpd) from 32.37 million bpd in Feb 2016. The organization intends to win the market share war against the U.S. shale producers. Iraq being the second-largest producer in the cartel has been a prime contributor to this growth so far. The country currently produces over 4 million barrels of oil a day. But the strategy seems to have backfired on the nation.

Print Friendly, PDF & Email

Related Posts