Iraq’s oil minister said on Thursday that the country has begun taking steps to reduce production in line with OPEC’s production deal.
Jabar Ali al-Luaibi told Reuters that Iraq has affirmed its commitment to the OPEC plan “by putting in place a studied plan to reduce production from the country’s fields from the start of the new year.”
OPEC agreed in late November to cut its overall production down by about 1.2 million barrels per day.
A group of fourteen non-OPEC producers, including Russia, have also agreed to trim production by 558,000 bpd.
Both production deals will be effective for an initial period of six months.
Prior to the OPEC deal, some Iraqi officials said they were concerned that lower oil revenues would deprive the country of crucial funding needed to fight Islamic State.
Iraqi officials also pushed back against production estimates that OPEC used to set the new production target.
OPEC releases monthly production data utilizing information submitted directly by group members as well as data collected from secondary sources.
Iraq directly reported a production level of 4.775 million barrels per day for September while OPEC said the country pumped 4.455 million bpd based on secondary sources.
Iraq agreed to sign onto the production deal after OPEC set the country’s estimated production output at 4.561 million bpd, Reuters said.
Iraqi officials are still exploring options to implement the production cuts and have not disclosed final details about its plans.
The International Energy Agency said last month that the production plans will likely help global oil inventories shrink faster than initially expected if producers deliver on the cuts.
The IEA warned that contractual and logistical issues may mean the output cuts may not immediately “fall neatly into place.”
Brent and West Texas Intermediate (WTI) prices have been creeping upwards since the start of the new year as traders anticipate reduced production.
Brent crude prices rose just over three-quarts of point to $56.92 per barrel after Thursday’s opening bell, up from a previous close of $56.46 per barrel.
WTI prices ticked up to $53.73 per barrel on Thursday morning, up from $53.26 per barrel at Wednesday’s closing bell.