Iraq is leading the way in OPEC's efforts to slash oil supply to Asia amid the global glut

• Iraq is at the forefront of OPEC plans to cut oil supply to the valuable Asian market, Bloomberg reported Wednesday.
• Iraq's state-owned oil company SOMO informed at least three of its Asian customers that they would not be given the full contractual volumes agreed upon for June, Bloomberg said.
• It is rare for Iraq to comply with OPEC deal cuts, and especially unusual for it to be leading the way in reducing supply to the Asian region, the news agency said.
• Watch oil trade live on Markets Insider.

Iraq, OPEC's second-largest oil producer, is at the forefront of the cartel's plans to cut oil supply to Asia as part of its historic deal to curb output, according to a Bloomberg report Wednesday.

SOMO, the state-owned company that markets Iraq's oil, notified at least three of its Asian customers that they would not be given the full volumes agreed upon for June contracts.

One of those customers would get a reduction of more than 30%, Bloomberg said, citing traders informed by the firm.

Another two Asian buyers reportedly said they received the supplies as requested.

Last month, the multiweek oil-price war between Saudi Arabia, Russia and other OPEC allies was finally resolved as the international consortium agreed on global crude oil production cuts of almost 10%. The deal meant production would be cut by 9.7 million barrels per day for May and June.

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Only about a month ago, Iraq had boosted its oil output target by 200,000 barrels a day for April to get a further hold at market share in the struggling energy sector that was faced with weak demand. The country's biggest customer, China, had seen a return in oil demand considering its decline in Covid-19 cases.

It is uncommon for Iraq to comply with OPEC production cuts, and especially rare for the country to be at the forefront in slashing supply to Asia, Bloomberg said.

SOMO's decision to withdraw from its oil allocations, the news agency said, is that the OPEC de facto leader's Saudi Aramco usually comes out with this information around the 10th of each month but has been delayed this time.

SOMO did not immediately return a request for comment by Markets Insider.

Another OPEC member, Kuwait, is also reportedly planning to supply less to its Asian customers from June until December.

The country's national oil company, Kuwait Petroleum Corp, told its customers that a minus 5% operational tolerance limit — a measure of appetite for tolerance impact — will be used for all June cargoes, Bloomberg said, citing a copy of the notice.

Oil prices enjoyed a relatively quiet day on Wednesday, with West Texas Intermediate crude trading around 1.3% higher at $25.68 per barrel.

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