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Iraq Finds New Market for Oil in United States; Breaks OPEC Pledge, Drives Up Crude Export

By Dipannita | Jun 16, 2017 12:39 PM EDT

Iraq has found its new export market in the United States, which is the second largest importer of oil. However, inspite of the falling oil flow, Saudi Arabia continues with its pledge to the OPEC of curbing production.

Following its promise, Saudi Arabia restricted its oil procurement from the country, Iraq. However, Iraq found its markets in the second largest importer of oil in the world, the United States. Iraq is the second largest oil exporting country amongst the Organization of Petroleum Exporting Countries (OPEC).

According to Bloomberg, alone in this month, the country exported 12 million barrels to the United States. Notably, this amount is also 50 percent higher, when compared to previous the month's production for the same time period. This further indicates that the country is not complying with its promise of curbing production as decided and agreed upon by OPEC.

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It is worth mentioning here that Saudi Arabia is leading the OPEC in its efforts to cut production for the next nine months, as decided in an earlier meeting. The decision to cut down on production by about 1.8 million barrels per day was made to prevent a global surplus, Business Standard reported.

Reports further state that Iraq's oil made it to the U.S market, towards the end of May and during the initial days of June and at the same time the oil flow in Saudi Arabia diminished to almost half the quantity. Moreover, the weekly Energy Information Administration data also indicates that Iraq surpassed Saudi Arabia as the supplier of oil to India, which is the fastest growing oil consumer as well.

In tandem with the OPEC's decision, Saudi Arabia's oil allocation will see further cuts in the coming months. And an anonymous source also revealed that the nominations cut that the U.S customers will see, is expected to be about half of 600,000 barrels per day.

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