Iraq Sells Its Oil for as Low as $30

Reports indicate that Iraq is selling some types of its oil for as low as $30 in order to capture global oil markets. According to the latest update from the official OPEC website, global prices for the OPEC oil basket have fallen from around $108 in the first half of last year to $38 on Thursday. Reuters reported on Friday, November 29, that Iraq may increase its oil production next year despite the surplus oil in the market, a situation that will intensify competition for maintaining market share among OPEC and non-OPEC members. The report adds that the existing competition for maintaining market share has already led Iraq to sell some types of its oil at steep discounts of $30. The main reason for the significant drop in oil prices is the surplus oil in the market, particularly the continuing volume of oil produced beyond consumption. Iraq's oil production increased by nearly 13% this year compared to last year. In 2015, Iraq increased its oil production by 500,000 barrels. The latest OPEC monthly report indicates that in September, Iraq's oil production reached 4.2 million barrels per day, but this figure decreased by more than 195,000 barrels per day last month. Overall, OPEC's oil production decreased by more than 256,000 barrels per day last month, reaching 31 million and 382 thousand barrels per day. This figure is still about 1.8 million barrels per day more than the global market's demand for OPEC oil. Reuters writes that global oil production growth is expected to slow down in 2016, but the lifting of sanctions on Iran next year, along with reduced tensions in Libya, could further increase OPEC's production levels. Iraq's major oil fields are located in the southern regions of the country, which are far from the ISIS conflict, and exports from these fields reached over 3 million barrels per day in the first half of this year. Iraq plans to increase exports from these fields to 3.2 million barrels per day next year. Oil production from Iraq's northern fields has also reached 600,000 barrels per day despite the war with ISIS and tensions between the central government and the Kurdistan region. Reuters notes that the significant growth in Iraq's oil production this year has surprised many observers. Some OPEC members are strongly insisting on reducing the oil production of the 12 members of this organization to raise global oil prices, but other influential members, such as Gulf Arab countries and especially Saudi Arabia, prioritize maintaining their market share over prices. In two weeks, OPEC oil ministers are scheduled to meet and discuss the status of global oil markets. Reuters writes that the remarkable growth in Iraq's oil production is due to the influx of substantial investments in the southern fields and the resumption of exports in the northern regions. The surge in Iraq's oil production comes at a time when Reuters recently reported that a confidential OPEC report it has obtained indicates that the demand for OPEC oil will decline over the next five years. On November 4, Reuters reported that the draft of this report prepared for the 12 members of the organization states that OPEC's oil production will also gradually decrease from 2015 to 2019.