Iraq now OPEC's second largest oil producer
Iraq is now OPEC's second highest oil producer, with production rising 24 per cent n 2011
Iraq jumped two places to No. 2 in Opec's rankings this year, cementing its position among the world's leading oil producers. Neighbouring Iran dropped three spots to fifth as international sanctions took hold.
Second only to Saudi Arabia within the Organisation of Petroleum Exporting Countries (Opec), Iraq's output rose by 24 per cent this year as the BP-led Rumaila field increased supply. Iranian production shrank by the same percentage to the lowest level since 1988, according to data, and its exports will continue to drop into 2013, according to the International Energy Agency.
"Iraq will continue to produce as much crude as it can because oil is and will remain its main source of income in the next few years," said Anas Alhajji, chief economist for NGP Energy Capital Management in, Texas, which oversees $13 billion in funds. "Iraq wants every penny it can get."
The turnaround illustrates the nations' contrasting geopolitical fortunes. Iraq has become the region's second- fastest growing economy, attracting investment from Royal Dutch Shell and Lukoil in the nine years since the ouster of Saddam Hussein.
Iran, stymied by a European Union and United States ban on oil exports, will suffer a decline in gross domestic product this year, according to the International Monetary Fund.
Iraq's crude production averaged 3.35 million barrels a day last month, data shows. Iran's daily output slumped to 2.7 million, less than Venezuela and Kuwait, Opec's third- and fourth-largest producers, respectively.
The reliability of Iraqi exports is still at risk as the central government in Baghdad and the Kurdistan Regional Government fail to agree on crude revenue and contract terms.
Exxon Mobil wants to sell its stake in the West Qurna-1 field in southern Iraq, oil minister Abdul Kareem Al-Luaibi said on November 11.
"Constraints on export pipelines, government bureaucracy, and the continuing dispute with the autonomous Kurdish region will keep the country short of its ambitious goals," Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management and a former Middle East specialist at Shell, said in an e-mail.
Global oil supply has risen this year, led by the US, where producers are using hydraulic fracturing, or fracking, to unlock deposits in shale formations from North Dakota to Texas and Oklahoma.
Production worldwide averaged 90.8 million barrels a day in the third quarter, up 2.7 per cent on 2011, the Paris- based IEA said in its monthly report on December 12.
Output among Opec members rose to a four-year high in August, a month after the EU banned imports of Iranian crude, as members sought to benefit from Brent prices at more than $100 a barrel.
Brent, the benchmark for more than half the world's crude, is poised for a fourth annual gain after averaging a record $111.68 a barrel this year on the ICE Futures Europe exchange. West Texas Intermediate futures, the most-traded US grade, is set to drop this year for the first time since 2008 in New York after rising domestic output bolstered inventories at Cushing, Oklahoma, the nation's biggest storage hub. WTI averaged $94.16 a barrel this year.