Iraq Says It Will Participate in OPEC Deal to Cut Output

Iraq will shoulder part of the burden of oil-output cuts, said Prime Minister Haider Al-Abadi, reversing the nation’s previous insistence for an exemption and potentially removing an obstacle to an OPEC deal next week.

“Iraq will cut its output to preserve prices,” Al-Abadi told reporters in Baghdad on Wednesday. The country wants OPEC to reduce production by a total of 900,000 barrels a day when it meets next week in Vienna because low prices are hurting global investment in the industry, he said.

The premier’s statement could improve the chances that the Organization of Petroleum Exporting Countries will implement its September pledge to reduce crude output to remove a global oversupply and boost prices. OPEC failed to finalize the details of supply curbs Tuesday, largely because of Iran and Iraq’s resistance to making any reductions. The government in Baghdad had argued that it needs all possible resources for its fight against Islamic State.

OPEC agreed on Sept. 28 in Algiers to reduce output to 32.5 million to 33 million barrels a day. OPEC estimates it pumped 33.6 million barrels a day last month, meaning a 900,000 barrel cut would place production in the middle of that range.

A $1 increase in the price of oil boosts Iraq’s revenues by $1 billion a year, Al-Abadi said. “If OPEC cuts down output at 1 million barrels a day, this will help prices to go up and Iraq will make gains from this,” he said.

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