SINGAPORE, (Reuters) – Political stability brought by the new government in Iraq increases the likelihood that the country’s oil production target will be met.
“The fact that we have a government that include the Iraqiya alliance is a step forward for stability,” Richard Jones, Deputy Executive Director of the IEA, told Reuters after a news conference.
“It increases the likelihood they will meet some of their targets. It’s definitely a positive sign.”
Iraqi politicians appeared to have broken an eight-month political impasse this week when the Sunni-backed Iraqiya alliance agreed to take part in a new government headed by incumbent Prime Minister Nuri al-Maliki.
Since mid-2009, Iraq has signed oil contracts that would boost its output to around 12 million barrels per day (bpd) within seven years, a jump from about 2.5 million bpd currently. That level of capacity would rival top exporter Saudi Arabia’s 12.5 million bpd.
“Iraq’s stability will be good for actually realising those contracts,” Jones said.
“We see Iraq as one of the strongest of new oil in the coming decade.”