Iraq appoints oil minister as Islamic State war limits output growth

BAGHDAD (Bloomberg) -- Jabbar al-Luaibi, the former head of Iraq’s biggest oil producer, was appointed oil minister as a costly war against Islamic State militants has capped investments in the OPEC country’s crude production.

The appointment was approved by parliament on Monday as part of a government reshuffle, according to a statement by deputy parliament speaker Humam Hamoudi. Al-Luaibi is the former head of the state-owned South Oil Co., which produces most of the country’s crude. He replaces Adel Abdul Mahdi who suspended his participation in the cabinet in March, citing disarray in government ministries. Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, holds the world’s fifth-largest oil reserves.

The drop in crude prices over the past two years has squeezed state revenue as the government waged a costly campaign against Islamic State militants who have seized parts of northern Iraq. Iraq produced 4.36 MMbopd in July compared with 4.44 MMbopd at the end of last year, according to data compiled by Bloomberg.