Iraq reportedly plans to join the global oil war with prices already near 18-year lows

iraq oil

  • Iraq is the latest oil-production giant to join the price war with production bumps, Bloomberg reported Tuesday.
  • The country aims to boost output by 200,000 barrels per day to 4.8 million barrels in April, a source familiar with the matter told Bloomberg.
  • Iraq would join Saudi Arabia and Russia as the oil giants hiking production and slashing prices in bids to claw market share.
  • The price war pushed Brent crude, the commodity's international benchmark, to an 18-year low on Monday, and prices have only slightly recovered in Tuesday's session.
  • Watch Brent crude's price update live here.

Iraq is suiting up to join the oil-price war as the coronavirus slashes into global demand and the world's biggest producers continue pumping unwanted inventory, Bloomberg reported Tuesday.

The country aims to boost output by 200,000 barrels a day in April to further grasp at market share in the struggling sector. Daily production would reach 4.8 million barrels per day, a source with knowledge of the plans told Bloomberg.Advertisement

Iraq is set to join Saudi Arabia and Russia as the pumping giants flooding the market with cheap oil. Shipments planned for April call for 3.6 million barrels per day as the nation employs its maximum export capacity, Bloomberg reported. Exports in March reached 3.4 million barrels per day on average.

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The price war kicked off in mid-March after Russia declined to cut production amid the coronavirus' hit to oil demand. Travel restrictions and stay-at-home activity cut usage around the world, leading the Organization of the Petroleum Exporting Countries to convene in an attempt to curb supply and prop up prices. Russia's refusal sank the effort and drove oil's biggest single-day price drop since 1991.
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Saudi Arabia quickly fired back with production hikes and price cuts, further pushing Brent crude to lower levels. Virus woes and price-war escalation dragged the international benchmark to $23.02 on Monday, its lowest price since 2002. Brent crude moderately recovered in Tuesday's session, trading at $26.07 per barrel at 3:15 p.m. ET.

Iraq's oil business hasn't been hit as hard as other nations facing the virus' economic toll. The country's biggest customer, China, has seen demand return alongside a decline in COVID-19 cases. China accounted for between 800,000 and 900,000 barrels of oil exported per day in March and is set to increase processing activity, Bloomberg reported. Now read more markets coverage from Markets Insider and Business Insider:Advertisement

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BRENT CRUDE

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