Iraq’s semi-autonomous Kurdish region is unable to meet the output cut demanded by Baghdad but otherwise implemented a lesser reduction. Instead of the requested 120,000 barrels per day (bpd) reduction the region has cut output by 50,000 bpd.
The Kurdish region officially known as the Kurdistan Regional Government or KRG has been under severe financial crisis resulting in the local government delaying the salaries of its employees. It is also the reason why they were unable to comply with OPEC+’s demands for output cuts for most of the current year. However, Iraqi officials are blaming the KRG’s independent oil policy that contributed to the country’s inability to meet OPEC+’s quota.
Baghdad and the KRG are currently in talks on how to resolve this problem and also on the issue of transferring oil revenue to the federal government.
Iraq had vowed to implement additional cuts of 400,000 bpd for the months of August and September as a means to compensate for their overproduction during the months of May to July. However, its 3.75 million bpd in August is still far above its effective quota of 3.40 million bpd with their May to July overproduction factored in.
Iraq may ask the OPEC+ monitoring committee for an extension on achieving their target which is set at the end of September. According to Iraqi oil minister Ihsan Ismaael they may need two more months.