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article imageIraq has to up oil output because of 'budget hole': FM

By AFP     Nov 22, 2016 in World

Iraq has to up its crude output because dwindling oil prices and the fight against Islamic State have left "a huge hole" in the economy, Foreign Minister Ibrahim al-Jaafari said Tuesday, as the OPEC cartel scrambles to agree a production cut deal.

"As oil makes up for more than 90 percent of Iraq's budget, a huge hole was knocked in the budget by the fall in prices right at the same time as we have had to increase spending on the army due to the fight against IS," al-Jaafari told reporters during an official visit in Budapest.

"We need international understanding because we have to increase production in this situation. Iraq may be a rich country but it has huge problems. It wouldn't be fair now if we decreased production," he added.

Iraq, OPEC's second-largest oil producer, has been pumping more oil over the past few months to reach an average of 4.56 million barrels per day (mb/d) in October.

In a surprise move, the Organization of the Petroleum Exporting Countries in September agreed a deal to trim production and boost prices depressed since 2014.

The accord -- aimed at cutting output by 750,000 million mb/d to between 32.5 and 33 mb/d -- is meant to be finalised on November 30 in Vienna.

But OPEC's 14 members have been at odds over the details of the plan, which is supposed to lead to a wider accord with non-OPEC producers including Russia -- the world's largest producer alongside cartel kingpin Saudi Arabia.

In addition to Iraq, Iran, Nigeria and Libya have also insisted they should be exempt from lowering their output.

OPEC officials held a series of technical meetings ahead of the key conference in the Austrian capital to iron out differences in the deal.

Speculation was mounting this week that the experts may be close to a deal to tackle the global supply glut, sending crude prices and energy stocks surging.

"There is certainty that everybody is on board," Nigerian OPEC delegate Ibrahim Waya was quoted by Bloomberg News as saying in Vienna on Tuesday.

In its November monthly report, OPEC said its members pumped 33.64 mb/d in October, 236,000 barrels more than in September.

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