Iraq plans for oil hedge

BAGHDAD, May 24, 2017 – Iraq is warming to the idea of an oil hedging programme that will fix crude oil prices, Oil Marketing Company director-general Falah Al Alamri said at the Iraq Petroleum Conference, which ran from May 22-23 in London.

The hedge could potentially extend to a quarter of the country’s oil production or exports, Alamri said. If the move is approved, Iraq would extend price protection to around 400 billion barrels per year, beating out Mexico’s 250-million-barrel annual hedge, which is now considered the largest-ever energy trade deal.

However, the idea is in a nascent stage and will require further study and deliberation before a government proposal is created.

“We will not rush. This is a long process,” Al Amri said. “We must make sure we do not lose money.”

The price lock would be a change in tactics for players in the Middle East that normally sign long-term contracts with refiners.

Read our latest insights on: