Iraq, Saudi Arabia ready to up oil output as US cuts off Iran waivers
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Iraq, Saudi Arabia ready to up oil output as US cuts off Iran waivers

As Baghdad prepares to compensate for shortfalls once waivers terminated, Trump says Saudi Arabia and other OPEC members will ‘more than make up’ resulting difference in oil supply

Iraqi President Barham Salih, right, walks with visiting Iranian President Hassan Rouhani, after inspecting an honor guard at Salam Palace, Baghdad, March 11, 2019. (AP/Khalid Mohammed)
Iraqi President Barham Salih, right, walks with visiting Iranian President Hassan Rouhani, after inspecting an honor guard at Salam Palace, Baghdad, March 11, 2019. (AP/Khalid Mohammed)

Iraq and Saudi Arabia were preparing on Monday to reap the benefits of the Trump administrations decision to end sanction waivers on Iran’s oil customers.

The US last year reimposed tough sanctions against Iran’s energy sector, but granted select countries six-month waivers to continue importing oil products from Tehran.

Those exemptions will end in early May, the White House announced on Monday.

An Iraqi government official said Baghdad was ready to boost oil exports by 250,000 barrels a day, to compensate for any shortfalls, once US sanctions waivers for Iranian oil end.

Saudi Arabia’s Energy Minister Khalid al-Falih said Riyadh was committed to “stabilizing” the oil market.

Saudi Arabia’s Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih speaks during a press conference in Riyadh, on December 20, 2017. (AFP PHOTO / FAYEZ NURELDINE)

The kingdom reaffirms its longstanding policy, which seeks to stabilize the markets at all times,” he said in a statement carried by the official Saudi Press Agency.

“The kingdom will coordinate with other oil producing countries to ensure adequate supplies to consumers,” he added.

The Saudi energy minister said Riyadh was “following closely” market developments.

Riyadh will work with both producer and consumer countries to ensure “market stability, in the interest of both parties and the growth of the world economy,” Falih said.

The White House has said Saudi Arabia and the United Arab Emirates — close US allies — would work to make up the difference in oil, to ensure that global markets are not rocked.

US President Donald Trump said that Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries (OPEC) would “more than make up” the resulting difference in the oil supply.

Iraq, the cartel’s second-largest producer, has the capacity to increase its crude oil exports, a top government official told AFP on Monday.

“We are ready to export another quarter-million barrels daily. The market’s needs will become clearer in the coming days,” he said.

The official did not say whether Iraq had already discussed the increase with OPEC or with the United States.

The countries that received exemptions in November were China, India, Japan, South Korea, Turkey, Italy, Greece, and Taiwan.

Iraq received a separate waiver that would allow it to continue importing Iranian gas and electricity, crucial to stop up the widespread power shortages in Iraq.

That initial exemption has been extended twice, and is set to end in June.

Iraq last month exported just under 3.4 million barrels per day, after having agreed last year to trim production, alongside other producers, so that prices would go up.

Oil prices hit a five-month high earlier this month, at more than $70 per barrel.

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