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Iraq, Citing Mosul Battle, Requests Exemption From OPEC Output Cut

Iraqi Troops Battle Pockets Of Resistance Near Mosul
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WATCH: Iraqi Troops Battle Pockets Of Resistance Near Mosul

Iraq has informed the OPEC oil cartel that it should be exempt from a planned output cut because it needs to raise more money to battle the Islamic State (IS) extremist group.

Baghdad is in the midst of a major campaign to oust IS from Mosul, the militants' biggest stronghold in Iraq -- a point made to other OPEC members by Iraqi Oil Minister Jabar Ali al-Luaibi over the weekend.

His remarks rattled oil markets on October 24, causing a 1 percent loss in premium crude prices.

OPEC is planning to spread a cut in output of approximately 750,000 barrels per day among cartel members at a meeting in November. However, it already has exempted Iran from the cut because Tehran's output was artificially depressed by sanctions until recently.

OPEC also may exempt Nigeria and Libya, both of which, like Iraq, are embroiled in battles against insurgencies that have raised their need for cash and depressed output.

Iraq, which produces 4.7 million barrels of oil a day, is OPEC's second largest producer behind Saudi Arabia.

Falah al-Amiri, head of Iraq's state oil marketer SOMO, argued that Baghdad's market share has been compromised by wars and sanctions since the 1980s.

"We should be producing 9 million [barrels per day] if it wasn't for the wars," he said.

Based on reporting by Bloomberg, Reuters, and CNBC

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