Iraq's oil output hit a post-Gulf War record of more than three million barrels per day (bpd) in August, up 630,000 bpd from the previous month, the Middle East Economic Survey (MEES) reported Monday.
The industry newsletter said Iraqi oil exports under the UN oil-for-food programme totaled 2.38 million bpd, in addition to domestic consumption and other cross-border trade.
The new high of 3.07 million bpd in August followed a two-month slump in exports, mainly due to pricing problems for sour crudes in the Mediterranean. In May, output had already jumped to 3.04 million bpd.
The Cyprus-based weekly warned that the record output could come at a high price for Iraq, which has been under UN sanctions since its 1990 invasion of Kuwait but authorised since the end of 1996 to export crude under a humanitarian programme.
"Iraq's policy of producing at maximum capacity regardless of the damage that is being done to the fields and reservoirs is a result of directives from the political authorities," it said.
MEES said the Iraqi leadership wanted "to prove that the country can exceed its pre-Gulf War production levels despite 10 years of sanctions".
Baghdad had an OPEC quota of 3.14 million bpd before the 1991 Gulf War over Kuwait but has pledged to reach six million bpd. This would require investments estimated at 30 billion dollars.
"There is growing concern both among oil professionals and in diplomatic circles, however, that this policy (of pumping at maximum capacity) could lead to short-term disruptions in production and exports," said MEES.
It warned of the impact on the world market, with prices already running at record levels.
"Any reduction or stoppage of Iraqi oil exports at this particular juncture, when global oil production capacity is being tested to the limit, could have a major impact on world oil prices."—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com )