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It took OPEC less than two hours on 11 June to agree that a current collective ceiling of 30mn b/d for its 12 members was enough to meet supply in the second half of the year. But, whilst rising Iraqi output had in recent months provided ‘good news’ to counterbalance outages in Libya and Nigeria, the country may yet provide OPEC with an even bigger challenge.
Ministers agreed to meet again on 27 November, but they may find themselves back in Vienna sooner should the security situation in Iraq deteriorate further and threaten supply from OPEC’s second largest producer.
In adopting a hasty decision to keep its output target unchanged, OPEC is gambling on a recovery in Libyan output and exports as well as a gradual ramp up from Iraq, as well as from Iran should international sanctions be lifted. But the odds on Iraq boosting production in the coming months are shrinking rapidly, as Jihadi fighters advanced toward Baghdad after sweeping across northern Iraq virtually unopposed, seizing the second largest city of Mosul, large tracts of Kirkuk and the oil refining city of Baiji in just two days after launching a surprise offensive (see p12).
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