Iraq warns of oil demand rising as global gas crisis worsens

Iraq warned that oil demand will probably rise as the supply crunch in natural-gas markets forces consumers to look for alternative fuels, echoing the views of fellow OPEC member Nigeria.

“There is some new concern,” Iraqi Oil Minister Ihsan Abdul Jabbar said in an interview.

Iraq is ready to pump more crude if the increase in consumption warrants it, he said from Dubai, where he’s attending Gastech, a conference for the gas and hydrogen industries. “If there is agreement within OPEC, we will be ready,” he said.

Gas prices have surged this month in Europe and Asia to the equivalent of around $155 per barrel of oil, as shortages of coal and wind power boost demand. Brent crude traded above $75 on Wednesday.

The head of Nigeria’s state oil company said oil could climb another $10 due to the gas shortages.

Still holding back

Oil’s already up about 45 per cent this year as major economies recover from the coronavirus pandemic and because of supply curbs by the Organization of Petroleum Exporting Countries and its partners.

OPEC+, a 23-nation group of which Iraq is the biggest producer after Saudi Arabia and Russia, is easing its cuts gradually. It still has about 5-million-barrels-worth of daily capacity off line.

Iraq pumped just over 4 million barrels a day last month. It can raise that figure to 5 million, Jabbar said, once OPEC+ ends the supply restrictions, which it’s scheduled to do in the second half of 2022.

© 2021 Bloomberg L.P.

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