IEA: Iraq's Oil Growth At Risk As Demand, For Now, Accelerates

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Iraq's oil growth targets look increasingly at risk, the IEA says, as threats to supplies from political instability and violence grow just as demand is picking up due to a stronger global economy.

Reuters

LONDON, June 17 (Reuters) - Iraq's oil growth targets look increasingly at risk, the International Energy Agency said, as threats to supplies from political instability and violence grow just as demand is picking up due to a stronger global economy.

Iraq is the second-largest producer in OPEC and its northern exports have been offline since March. OPEC output has also been hit by unrest in Libya, sanctions on Iran and oil theft in Nigeria.

"Within OPEC, Iraq remains the main source of most of the expected capacity growth, but this expansion looks increasingly at risk," Maria van der Hoeven, the IEA's executive director, wrote in the report's Foreword.

Still, the adviser to the United States and other industrialised countries also said in its Medium Term Oil Market Report on Tuesday that global growth in oil demand may start to slow down by the end of this decade due partly to high prices, and shale oil would start to spread outside the United States.

Oil prices jumped to almost $115 a barrel last week, the highest since September, as advances by Sunni insurgents in Iraq raised concern that more of the country's supply could be disrupted.

At present, the agency expects OPEC to increase its production capacity by 2.08 million barrels per day (bpd) - to 37.06 million bpd by 2019. More than 60 percent of the growth is expected to come from Iraq.

The report contrasts with the IEA's previous medium-term update in May 2013, which forecast U.S. shale oil would help meet most of the world's new oil demand, leaving little room for OPEC to lift output without risking lower prices.


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