Iraq Denies Opec Withdrawal, Seeks Higher Output Quota

Iraq has officially denied reports that it intends to leave the Organization of the Petroleum Exporting Countries (Opec), following a Reuters report that Baghdad had considered withdrawal if the group did not allow a significant increase in output. The denial came after the United Arab Emirates' sudden withdrawal in early May made Opec membership a sensitive topic. Iraq was the second-largest producer among Opec members before the US–Iran conflict disrupted its production.

Official Statement and Position

In a statement issued at the end of last week, Iraq's Ministry of Oil clarified that neither the Prime Minister nor the government has raised the issue of withdrawal. Instead, Iraq has consistently emphasized the importance of reassessing Opec production ceilings based on the sustainable production capacities of member states, as per the agreement approved by all concerned countries. The ministry also highlighted understandings regarding Iraq’s specific security and economic situation, noting a high level of understanding among member states about the challenges the Iraqi oil industry has faced over more than forty years of wars, blockades, and recent destruction from attacks by Iran.

Production Decline and Quota Requests

According to the latest Opec Monthly Oil Market Report, Iraq's oil production fell to 1.76 million barrels per day (bpd) in May, down from almost 4.2 million bpd in February, due to the US-Israeli war on Iran and the effective closure of the Strait of Hormuz. The ministry stated that Iraqi oil production should reach a fair level, enabling the country to initially reclaim its position as the second-largest producer among Opec members. Higher production is also needed to achieve desired outcomes from development and rehabilitation projects across all sectors of the oil industry, which constitutes the main backbone of Iraqi financial revenues. Iraq’s Opec oil production quota for July is 4.378 million bpd.

Future Production Goals

Iraqi government spokesperson Haider al-Aboudi told Reuters that Iraq is working to restore its full oil export capacity and aims to raise oil production to 7 million bpd over the coming years, though no exact timeframe was specified. The ministry added that Opec and the wider Opec+ group have launched a process to reassess the maximum sustainable production capacity of member states, currently being carried out in coordination with an independent international consulting firm and with active participation from Iraq, according to the approved schedule.