Iraq, seeking to more than double oil output by 2015, is poised to overtake Iran as OPEC’s second- largest producer by the end of the year as sanctions hobble crude production in its Persian Gulf neighbor.
Iraq is pumping at the highest rate since Saddam Hussein seized power in 1979, supported by foreign investors such as Exxon Mobil Corp. and BP Plc (BP/) that are developing new fields and reworking older deposits. The country produced 3.03 million barrels a day in April, 7.7 percent more than in March, while Iranian production declined to 3.2 million barrels a day, according to an OPEC monthly report yesterday. Iraq’s output last exceeded Iran’s in 1988, when the countries ended their eight-year war, statistics compiled by BP show.
With rising oil supply from Libya and Saudi Arabia, the recovery of Iraq’s biggest foreign currency earner is helping alleviate concern that a European Union embargo on Iranian crude starting July 1 will squeeze global supply. Tensions over Iran’s nuclear program and the prospect of curbs on its oil sales pushed Brent crude to a 3 1/2-year high of $128.40 a barrel on March 1. Oil fell as low as $111.40 today.