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Iraq, Iran Agree to Coordinate Oil Stance at OPEC Meeting

Iraq, Iran Agree to Coordinate Oil Stance at OPEC Meeting

Iraq and Iran said they will take a common position on OPEC’s production policy when the Organization of Petroleum Exporting Countries meets this month.

The neighbors agreed “to coordinate the two countries’ stance at OPEC,” Asim Jihad, a spokesman for Iraq’s oil ministry, said today by telephone from Baghdad, without elaborating. OPEC ministers plan to meet to assess markets and the group’s output ceiling on June 14 in Vienna.

Iran and Iraq will adopt a unified position on OPEC’s production, and they emphasized the need for its 12 members to pump crude in line with their collective target, Iran’s state-run Press TV reported, citing a meeting in Baghdad yesterday between Iranian Oil Minister Rostam Qasemi and Iraqi Prime Minister Nouri al-Maliki. Iran will insist that OPEC maintain its current ceiling for crude when the ministers gather, Press TV said in a separate report yesterday, citing Qasemi.

Iran and Iraq are OPEC’s second- and third-biggest producers, respectively, after Saudi Arabia, which has boosted supplies as U.S. and European sanctions against Iran curb the Islamic republic’s exports. OPEC produced 31.62 million barrels a day in April, 5 percent more than its 30 million barrel-a-day ceiling, according to monthly estimates from the group’s secretariat. Iraq holds the organization’s presidency this year.

Brent crude, a European benchmark for more than half of the world’s oil, dropped below $100 on June 1 for the first time since October as reports of higher unemployment in the U.S. and euro area signaled fuel demand may tumble. Brent for July settlement tumbled $3.44, or 3.4 percent, to $98.43 a barrel on the ICE Futures Europe exchange in London, the lowest close since Jan. 27, 2011. The contract lost 15 percent through May.

(Updates with Iraqi comment in first paragraph.)