OPEC’s second-largest producer Iraq is one of the OPEC+ members struggling to boost its oil production as much as its quota in the pact allows, with January output down 120,000 barrels per day (bpd) to its production cap, according to data from state marketing firm SOMO seen by Reuters.

SOMO figures showed that instead of increasing, oil production in Iraq fell by 63,000 bpd in January compared to December. This was due to insufficient storage capacity, an oil official in Iraq told Reuters.

Exports from OPEC’s second largest producer after Saudi Arabia fell in January due to bad weather, maintenance of export terminals and technical problems, the official said.

Unscheduled outages and a lack of capacity to pump more caused production to drop or stagnate in January among OPEC members Iraq, Iran, Angola, Congo and Libya, a revealed a Reuters investigation earlier this week.

Iraq and several other OPEC and OPEC+ producers are not pumping as much as the OPEC+ pact requires, which essentially tightens the market and skews analysts’ assumptions about market balances.

For six months now, OPEC+ has actually added volumes to the market each month below the nominal monthly increase of 400,000 bpd announced at each of the OPEC+ meetings since August 2021.

At its last monthly meeting on Wednesday, the OPEC+ group announced a further 400,000 bpd increase in production for March.

While the nominal increase is modest, as in the previous seven months, many producers in the OPEC+ group are struggling to pump up to their quotas, leaving a widening gap between the increase in production on paper and actual production growth, leaving the market tighter than many analysts and forecasters anticipated just a few months ago.

Going forward, the market will be looking closely at how much of this increase OPEC+ can actually deliver, given that half of its members have lagged in ramping up production to their quotas until now. present, while more producers—with some exceptions such as Saudi Arabia and the United Arab Emirates—will struggle to increase production.

By Tsvetana Paraskova for Oilprice.com

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