Iraq increases oil exports, pumps above OPEC+ target

Iraq increases oil exports, pumps above OPEC+ target
Iraq has told OPEC+ it will make up for over-production in May and June through larger cuts in later months. (AFP)
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Updated 31 July 2020

Iraq increases oil exports, pumps above OPEC+ target

Iraq increases oil exports, pumps above OPEC+ target
  • Industry figures for July show second-biggest producer still failing to fulfill pledges on production cuts

LONDON: Iraq’s crude oil exports have increased so far in July, shipping data showed and industry sources said, suggesting OPEC’s second-largest producer is still undershooting its production cut target under an OPEC-led deal.

Exports from Basra and other southern Iraq terminals to July 29 averaged 2.75 million barrels per day (bpd), based on figures from Refinitiv Eikon and an industry source. That is up 50,000 bpd from June’s official figure for southern Iraq exports.
“No massive change, Basra is still 2.7-2.8 million bpd,” the industry source said, referring to the change in exports seen since the first 20 days of July.
The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, began a record supply cut in May to bolster oil prices hammered by the coronavirus crisis. Iraq is cutting output by 1.06 million bpd under the deal.

HIGHLIGHTS

● Southern Iraq exports so far in July average 2.75 million barrels per day.

● OPEC-led oil supply cut deal started in May.

● Iraq, others, under pressure to boost compliance.

The July figures imply Iraq is still some way from fulfilling its pledges and is exporting far more than a July loading program indicated.
Iraq says it is committed to the OPEC+ agreement and will boost compliance. Iraq had told OPEC+ it would make up for over-production in May and June through larger cuts in later months.
The south is the main outlet for Iraq’s crude, so a good part of its OPEC+ cut should show up in lower exports.
Baghdad was reluctant to join previous OPEC-led supply cut efforts that began in 2017. Iraq has said it is in the country’s interest to comply with the current deal.
However, exports from northern Iraq have increased in July, tanker data showed and the industry source said. So far, northern exports are at least 400,000 bpd, which would be up from 370,000 bpd in June. The boost in northern shipments means Iraq’s exports are up by 80,000 bpd in July.


SAMA calls for more M&A deals in insurance sector

The Saudi Central Bank (SAMA) has issued a statement encouraging companies in the insurance sector to consider merger and acquisition (M&A) deals. (Shutterstock/File Photo)
The Saudi Central Bank (SAMA) has issued a statement encouraging companies in the insurance sector to consider merger and acquisition (M&A) deals. (Shutterstock/File Photo)
Updated 26 sec ago

SAMA calls for more M&A deals in insurance sector

The Saudi Central Bank (SAMA) has issued a statement encouraging companies in the insurance sector to consider merger and acquisition (M&A) deals. (Shutterstock/File Photo)
  • Through mergers, SAMA said it aims to improve customer service and efficiency, and reduce costs
  • M&As can make sector more competitive and strengthen its financial position, it added

RIYADH: The Saudi Central Bank (SAMA) has issued a statement encouraging companies in the insurance sector to consider merger and acquisition (M&A) deals.

SAMA stressed the sector’s importance to the Saudi economy, and the part it plays in the government’s Financial Sector Development Program.

SAMA cited the merger of Walaa Cooperative Insurance and Metlife AIG ANB Cooperative Insurance, and of Gulf Union National Cooperative Insurance and Al-Ahlia Insurance, as successful examples of such deals and how they helped boost the financial solvency of the companies involved by improving the insurers’ capital.

Research shows that M&As can make the sector more competitive and strengthen its financial position.

Through the M&As, SAMA said it aims to improve customer service and efficiency, and reduce costs.

Last year proved to be “eventful” for M&As in the Middle East and North Africa, in particular the Kingdom, said Bader Alamoudi, senior country officer for JP Morgan Saudi Arabia.

He told Argaam in December that M&A activity was driven by companies looking to streamline costs and boost efficiency and optimization, particularly during periods of prolonged uncertainty.

“As in previous years, the financial sector has been one of the most active in terms of M&A activity in the region during 2020,” he said.

“The consolidation theme has created a ripple effect on other sectors, including energy, real estate etc., where we have started to witness heightened activity. I believe such activity will continue next year as well.”

Also notable were the stimulus packages provided by SAMA, which proved to be an immense source of cash flow that helped ease the payment burden on firms.

Alamoudi told Argaam that he expected the improvement in oil prices to rekindle retail confidence and fuel investment banking activities. “2021 is going to be a very interesting year with lots happening across all lines of business,” he said.