Iraq's Minister of Oil has declared that a mutual agreement between all OPEC members to freeze crude oil exports must occur in order to bring the price of oil up. Iran is yet to agree to this proposal after weeks of deliberation between OPEC members. The Organization of Petroleum Exporting Countries decided two years ago in 2014 to keep output levels in order to defend market share and global oversupply. Yet the level of oversupply has reached 1.7 million barrels per day.
The urgency to come to an agreement is based on the fact that the price of oil is at an all time low as it is currently traded at $30 per barrel. Iran has not only considered the agreement between Saudi Arabia, Russia, Qatar and Venezuela unrealistic, but is also aiming to begin exporting oil after years of sanctions which have no doubt affected the economic state of the Persian Gulf oil producer. Since sanctions were lifted in January, Iran hopes within a year that their oil output is 1 million barrels per day. Iraq currently produces 4.7 million barrels of oil per day and 4 million are exported. Falah Al-Amr, chairman of Iraq’s state Oil Marketing Organization said it would take years for the market to balance out. Iraq has since experienced severe budgetary strains due to internal wars and has already cut spending by 13%. However, Iraq was still able to produce an additional 650,000 barrels per day.