Iraq, OPEC’s second biggest producer has begun output cut measures in line with the OPEC decision reached last month. Iraq's oil minister Jabar Ali al-Luaibi confirmed on Thursday that Iraq has begun implementing measures to reduce national oil output in keeping with an OPEC decision.

OPEC agreed in November to cut output by 1.2 million barrels per day from January 2017 to support prices. Iraq, OPEC's second-largest producer, agreed to reduce output by 200,000 bpd to 4.351 million bpd.

Iraq had resisted production cuts, saying it needed revenue to fund a war against Islamic State militants. Luaibi said Iraq is reviewing several options to implement the reduction, including cuts from Kirkuk oilfield, southern fields being developed by oil majors or other state-run areas.

Iraqi government could have to pay back the oil companies for lost revenue in the event of production being curtailed for reasons beyond the drillers' control. That would be painful for Iraq. The country is already in financial straits after more than two years of low oil prices.