Iraq Freezes Oil for Pre-Payment Deal for Now, Oil Minister Says

(Bloomberg) -- Iraq, OPEC’s second-biggest producer, decided to halt its prepayment deal for oil with a Chinese company after prices rose, Iraq’s Oil Minister Ihsan Abdul Jabbar said in an interview with BBC Arabic.

In November, the Iraqi government sought upfront payments in exchange for a long-term crude-supply contract to help mitigate its dire financial situation. The country opted for a prepayment deal to raise as much liquidity as possible in January and February this year, concerned that oil prices won’t exceed $40 for barrel, Jabbar said.

After prices stabilized, Jabbar said “we decided to freeze this attempt or option and we didn’t activate it.”

Crude oil futures in New York climbed 22% this year driven by Saudi Arabia’s unilateral output cuts in February and March and an improving demand outlook. The contract for delivery in March settled at more than $59 a barrel on Friday.

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