Iraq can offset the impact of the Iran nuclear deal on oil prices and competition for export markets with higher production and improved regional trade, the oil ministry said Wednesday.

The deal reached between Tehran and world powers Tuesday could lead to the lifting of economic sanctions on Iran and allow the Islamic republic to increase its oil exports.

Experts predict that the return of Iranian oil exports could help keep oil prices low.

Cash-strapped Iraq relies on oil exports for the vast majority of its income.

"Iraq's income will be reduced but this has been taken into account," oil ministry spokesman Assem Jihad told AFP.

World oil prices collapsed by 60 percent between June 2014 and January, when they hit a low of $45 a barrel. This was due in part to excessive supplies caused by the boom in US shale oil.

"Iraq has for some time already been working to increase production and exports to compensate for the losses caused by oil prices," Jihad said.

Iraq's exports hit a record high of nearly 3.2 million barrels per day in June.

Assem Jihad stressed that Iran's expected exports hike would not be the only factor affecting global oil prices and argued that Middle East producers all had something to gain from a more stable region.

The landmark Iran deal "will lead to stability and increase the commercial and economic exchange in the region, including in Iraq," the spokesman said.
Source: AFP