Iraq gives full February crude supply to three Asia, Europe buyers despite OPEC cut

(Reuters) - Iraq, OPEC’s second-largest oil producer, has given full supply allocations of Basra crude to three refiners in Asia and Europe for February, three sources with direct knowledge of the matter said on Monday.

A worker checks the valves at Al-Sheiba oil refinery in the southern Iraq city of Basra, January 26, 2016. REUTERS/Essam Al-Sudani/File Photo

“We didn’t get any cut. What we nominated, they gave,” one of the buyers said.

Iraq’s State Oil Marketing Company (SOMO) could not be immediately reached for comment.

The full allocation may point to exports from Iraq’s southern Basra ports remaining high after they reached a record 3.51 million barrels per day (bpd) in December, before an OPEC agreement to cut output took effect in January.

The Organization of the Petroleum Exporting Countries agreed to cut production by 1.2 million bpd in the first half of 2017 to reduce global oversupply and prop up prices.

Iraq’s Oil Minister Jabar Ali al-Luaibi said earlier on Monday that unprecedentedly high exports from the south would not affect Iraq’s decision to lower production in January in line with the OPEC agreement, according to a ministry statement.

Still, SOMO planned to export 3.5 million bpd in January, on par with December’s record, its loading program showed last month.

Iraq had also boosted 2017 oil sales to China, India and the United States prior to the OPEC supply cuts.

Global oil benchmarks Brent and West Texas Intermediate extended losses on Monday, down $1 a barrel, after Iran’s exports surged and U.S. oil explorers activated more drilling rigs that could lead to higher output. [O/R]

Earlier on Monday, Iraq raised its official selling price for Basra Light crude to Asia in February, but cut prices for Europe and the United States.

Reporting by Florence Tan in SINGAPORE, Olga Yagova in MOSCOW and Chen Aizhu in BEIJING; Editing by Tom Hogue and Dale Hudson