Iraq Warns of the Collapse of Oil Prices Due to Abundant Supplyً
A spokesman for the Iraqi Oil Ministry said on Monday, 9th March 2020 that pumping more oil to the markets in these circumstances will lead to a price collapse because the Saudi Aramco company reduced its prices to sell oil at a time when the markets are suffering from oversupply
He added that increasing production will harm all producing countries including Iraq, adversely affect the global economy, and will reduce the chances of investment flowing into the global oil Industry. Therefore, all countries should accept setting production levels to reduce supply availability and rebalance supply and demand, which will lead to higher oil prices at a later time.
It is worth noting that Iraq is the second largest oil producer in OPEC after Saudi Arabia, and that Iraq’s oil production increased by 3% in February 2020 to 4.5 million barrels per day, with exports increased to about 3.8 million barrels per day.
The spokesman said that Iraqi officials made efforts to resolve the dispute between the delegations of Saudi Arabia and Russia and bring the points of view closer between them, but the two parties’ insistence on adhering to their positions led to the failure of reach an agreement, which caused the drop in oil prices.