By John Lee.
According to a report from Markets Insider, the biggest challenge to the recently-announced OPEC oil production cuts is Iraq.
Under the agreement, Iraq has committed to cut production by 210,000 barrels per day. “That sounds simple in theory,” writes Michael McDonald, “just switch off a few pumps. In reality it’s much more difficult than that.”
“Iraq … has made with international oil companies which operate its massive southern oil fields. Those companies are not just going to go along with an edict issued by the Iraqi government – they have contracts to fulfill and they are going to try and maximize their own profits according to those contracts. Thus unlike Saudi Arabia, Iraq is not really in control of its own production.”