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Iraq remains the largest oil exporter to India despite cuts

The Iraqi flag flutters during the offic
(Photo credit: AHMAD AL-RUBAYE/AFP/Getty Images)

Iraq remained the largest oil exporter to India, despite its pledges to cut production.

The Iraqi State Oil Marketing Organization (SOMO) said Iraq’s oil exports to India decreased during the last period, due to a number of requirements, including its commitments to OPEC decisions, but it remained in the first place.

Iraq: largest oil exporter to India

In turn, SOMO director general Alaa al-Yasiri, said, “Iraq’s oil exports still retain the first place among crude oil exporters to India for the fourth year in a row.”

Al-Yasiri added: “the mechanism adopted in allocating quantities of crude oil to international companies that buy Iraqi crude oil is in line with the quantities available for export, which the company is informed of by the Ministry of Oil.”

He pointed out that these quantities are variable annually according to a set of technical and logistical factors and in line with the OPEC’s decisions regarding Iraq’s share of global production.

He added that oil exports to India are in line with SOMO’s strategy of targeting global markets, in a way that guarantees good market shares in promising markets.

Al-Yasiri added: “According to this year’s production plan, which is based on the OPEC+ decision to reduce production. The quantities allocated to all international companies, not to Indian refiners only, have been reduced in different proportions and according to the goals set for each market.”

He said “the reduction rate for Indian companies was less than that of other international companies.”

“This procedure has been applied by all countries exporting crude oil in the region to all international companies contracting in this field,” he said.

Unprecedented actions

Earlier, Reuters said that Iraq has reduced annual supplies of Basra crude oil to several Indian refiners by up to 20% for 2021 in a rare move by OPEC’s second-largest oil producer which is trying to meet its obligations under the group’s production deal.

As Iraq was the top oil exporter to India in 2020, a reduction in long-term Basra crude supplies could erode Baghdad’s market share in the world’s third largest oil importer and consumer.

SOMO has reduced the 2021 Basra term volumes to several Indian refiners by between 10% and 20%, sources told Reuters.

Iraq has been striving to meet its output target under an agreement between the OPEC and allies, including Russia, to limit production and support global oil prices.

OPEC’s statement

In a related context, OPEC said in statement that Iraq is still committed OPEC+ agreement oil cuts and compensating for overproduced volumes in accordance with OPEC and its allies’ decisions.

The Iraqi Ministry of Oil announced that Iraq’s oil exports increased to 2.868 million b/d in January, from 2.846 million b/d the previous month.

The ministry added that exports from Basra ports in the south of the country amounted to 2.77 million b/d in January, up from 2.75 million b/d a month ago.

The average shipments from Kirkuk to the Turkish port of Ceyhan were 98,000 b/d in January.

The rise in oil prices boosted Iraq’s oil revenues for January to about $4.74 billion, at an average price per barrel of $53.294.

Oil revenues are the main source of income for Iraq.

Iraq sold crude at an average price of $47.765 a barrel in December.

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