Crude Output Dips in June Amid Tighter Quota Compliance: Iraqi SOMO

Iraq's total oil production, including flows from the semi-autonomous Kurdistan region, fell slightly in June from a month earlier, State Oil Marketing Organization said July 7, signaling tighter compliance with its OPEC+ quota, which rose in the previous month.

Total oil production fell to 3.862 million b/d in June, down from 3.879 million b/d in May, SOMO figures showed. Federal production nearly held steady at 3.42 million b/d, while Kurdish output fell 2.6% to 441,000 b/d.

Total exports dropped 0.5% to 3.32 million b/d in June from a month earlier, as federal exports nearly held steady at 2.89 million b/d and Kurdish volumes fell 2.4% to 427,700 b/d.

Domestic consumption, which included direct crude burn and refinery runs, rose 25% to 607,000 b/d. Crude burn usually rises in the hot summer months when electricity usage increases at power plants.

Oil stocks in June shrunk 65,000 b/d compared with a 56,000 b/d build-up in May.

Rising quotas

Iraq, whose quota rose to 3.954 million b/d in June from 3.905 million b/d a month earlier, improved its compliance in May, according to SOMO figures. Iraq's quota rises to 4.016 million b/d in July.

Iraq, OPEC's second largest producer, struggled in the beginning of 2021 and for most of 2020 to adhere to its quota amid the COVID-19 pandemic, the oil price rout, and the financial crisis gripping the country.

OPEC and its allies have been gradually lifting production quotas this year in anticipation of higher global oil demand as the world continues to emerge from the pandemic.

The OPEC+ coalition failed this and last week at virtual meetings to agree on a course of action for lifting quotas after July.