Iraq announced on Friday that it would slash its oil production further by 400,000 barrels per day in the month of August and September in order to equilibrize its overproduction over the past three months.

Ihsan Abdul Jabbar, Iraq's Oil Minister, issued a joint statement along with his Saudi counterpart Prince Abdulaziz bin Salman that the Western Asian nation's reduction in oil output was in addition to the o the 850,000 BPD that it had pledged to decrease in the months of August and September in compliance with an OPEC+ supply pact.

Making references to data providers of the oil industry such as the International Energy Agency, the joint statement said, "The reduction could be adjusted when the six secondary sources publish their production figures." With the latest cut, Iraq's total reduction in production in August and September will add up to 1.25 million BPD for each month

Oil Refinery
Oil Refinery (Representational Picture) Needpix

Complete Commitment to OPEC+ Deal

The two ministers stressed their full commitment to an OPEC+ deal curbing oil production. Abdul Jabbar confirmed Iraq's firm commitment to the OPEC+ agreement, adding that Iraq would reach 100 percent conformity by the beginning of August.

The two ministers discussed in a phone call the latest developments in the oil markets, continued recovery in global demand and progress made towards implementing the OPEC+ agreement. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, began a record supply cut in May to bolster oil prices hammered by the coronavirus crisis.

Enhancing Stability of Global Oil Prices

OPEC, Russia and other producers agreed to cuts of 9.7 million BPD, or 10 percent of global output, from May 1. In July, they delivered 5.743 million BPD of the pledged reduction, equal to 94 percent compliance, a Reuters survey found.

Iraq agreed to cut output by 1.06 million BPD under the deal. The Saudi and Iraqi energy ministers said efforts made by OPEC+ member states would enhance the stability of global oil markets, accelerate its balancing and send positive signals to the markets, the statement said.

OPEC oil output rose by more than 1 million bpd in July as Saudi Arabia and other Gulf members ended their voluntary extra curbs on top of the OPEC-led deal, and other members made limited progress on compliance.

(With inputs from agencies)