Iraq pledged to cut 400,000 barrels per day of output to make up for its lack of compliance with an Opec+ pact to reduce production.
Opec’s second largest producer will commit to the cuts, in addition to the 850,000 bpd it is due to make in August and September, according to the Iraqi oil minister, Ihsan Abdul Jabbar.
"The reduction could be adjusted when the six secondary sources publish their production figures," a joint statement by the Iraqi and Saudi Arabian energy ministries read. The secondary sources refer to data from the energy industry provided by organisations such as the International Energy Agency.
The additional cuts would bring the total volume of Iraq’s output reduction to 1.25 million bpd.
Opec+, which is led by Saudi Arabia and Russia, began easing an historic pact to slash production earlier this month. The alliance is now cutting back 7.7m bpd of output. Iraq, as well as Nigeria, Kazakhstan and Angola, failed to fully comply with the earlier pact to cut 9.7m bpd from the markets. The curbs, which were introduced from May until July helped stabilise energy markets, which suffered record crunch in demand and prices.
Oil prices gave up some of their gains during trading on Friday following tensions between the US and China. US President Donald Trump issued an executive order banning US residents from engaging in business with Chinese parent companies of WeChat and TikTok.
Brent, the most widely traded crude benchmark, was down 1.13 per cent at $44.58 per barrel at 3.49pm UAE time. West Texas Intermediate, the key US gauge was down 1.33 per cent at $41.39 per barrel.
Prices surged to five-month highs this week following a larger-than-expected crude inventory draw in the US. The explosion of an ammonium nitrate cache in Lebanon on Tuesday, which left 157 dead, briefly rallied prices.
