Prices between $70 and $75 per barrel by the end of the year are optimal for producers, the Iraqi Ambassador said on Tuesday.
'By the end of this year we would like to see prices reach between $70 and $75 per barrel,' the ambassador said.
The Iraqi Ambassador to Ankara, Hisham Al-Alawi told Anadolu Agency in an exclusive interview ahead of OPEC's full ministerial meeting on Nov. 30, that the Iraqi government is pleased with the positive outcome from the oil cut decision, and if necessary will support an extension in the upcoming OPEC meeting next Thursday.
OPEC members on Nov. 30 last year unanimously agreed to lower oil production by 1.2 million barrels per day (bpd) down to 32.5 million bpd. This is the first production cut by the organization in eight years, and its first intervention in the global oil market since mid-2014 when oil prices began to fall. The agreement became effective on Jan. 1, 2017.
Some OPEC and non-OPEC countries would like to extend the oil cut decision beyond the expiry date of March next year until the end of 2018.
'This is important for us. We want to encourage that [extension of oil cut decision], so if there is a practical need to extend the agreement, it is likely that all governments will support it,' he asserted.
He explained that extra revenue from oil sales is much needed in Iraq to reconstruct cities and provinces that were destroyed by Daesh militants over the past three years.
'So an increase in oil prices is very welcome, but at the same time we think currently the price is not at the best level,' he stated.
He added that diversifying the economy and increasing revenues from other sources is also on Iraq's agenda.
'We are also keen to get support from friends in the region as well. An important conference in Kuwait in February next year will look at how the international community can support the government when it comes to the reconstruction of damaged provinces,' he said.
The extension to the oil cut agreement is expected to help digest a significant part of excessive inventories for the rest of the year.
In May 2017, OPEC members unanimously agreed to extend their previous agreement by nine more months to March 2018 to lower oil output. The members agreed to prolong their accord through March 2018, and to continue to lower oil production by 1.2 million barrels per day (bpd) down to 32.5 million bpd.
With non-OPEC participants, the oil production cut will see 1.8 million barrels per day (bpd), equal to 2 percent of global production.
By Gulsen Cagatay