Iraq appoints new oil minister

oil drums

Jabbar al-Luaibi, the former head of Iraq’s biggest oil producer, was appointed oil minister as a costly war against Islamic State militants has capped investments in the OPEC country’s crude production says Bloomberg

The appointment was approved by parliament on Monday as part of a government reshuffle, according to a statement by deputy parliament speaker Humam Hamoudi. Al-Luaibi is the former head of the state-owned South Oil Co., which produces most of the country’s crude. He replaces Adel Abdul Mahdi who suspended his participation in the cabinet in March, citing disarray in government ministries. Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, holds the world’s fifth-largest oil reserves.

The drop in crude prices over the past two years has squeezed state revenue as the government waged a costly campaign against Islamic State militants who have seized parts of northern Iraq. Iraq produced 4.36 MMbopd in July compared with 4.44 MMbopd at the end of last year, according to data compiled by Bloomberg.

Related News: Opec, Saudi Arabia and Others to Stabilise Oil Market – Saudi oil minister

Saudi Arabia is working with other OPEC members and producers from outside the group to stabilize the market, Saudi Oil Minister Ali al-Naimi said.

The global economy is going through an unstable period, al-Naimi said. Crude demand is expected to rise by 1 million barrels a day every year in this decade, and the world requires more investments in oil to compensate for declining recovery rates, he said. The recovery rate for all the world’s oil fields is decreasing by about 4 million barrels a day, he said.

“Saudi Arabia is a very reliable supplier. We cooperate with OPEC and non-OPEC countries to stabilize the market,” al-Naimi said at a conference in Manama, Bahrain. “We need billions of dollars to continue exploration and producing oil and to invest in spare capacity to stabilize the market.”

Threatened by surging output mainly from North America and Russia, the Organization of Petroleum Exporting Countries has been pumping above its target for 17 months as it seeks to take market share from higher-cost producers. Oil has tumbled since the middle of last year as U.S. stockpiles and production expanded, contributing with OPEC to global oversupply.

Market Re-Balancing

Brent crude, a pricing benchmark for more than half of the world’s traded oil, was trading 20 cents lower at $43.94 a barrel in London at 1:30 p.m. local time. Brent has lost 23 percent this year.

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