Iraq is considering withdrawing from OPEC if its demands for a higher oil production quota are not met. This potential move is fueled by the country's need for increased "petrodollars" to fund post-conflict development and cover growing public expenditures, particularly as current oil revenues are reportedly only sufficient to cover 17% of Iraqi salaries due to export blockades. While some Iraqi officials are pushing for an increased quota or even a 10-year exemption from quotas as compensation for war-related export difficulties, the official stance is that an exit is not being discussed in the near future.
Iraq has a substantial oil production capacity, estimated at around 5 million barrels per day (bpd), with projections to increase to over 6 million bpd by the end of 2028. Before recent conflicts, Iraq was producing more than 4 million bpd and was often accused by OPEC+ of exceeding its quota. However, current exports are severely limited, with only 330,000 bpd exported in March and a mere 200,000 bpd through the Kurdistan pipeline in June due to the Strait of Hormuz closure, drastically reducing oil revenues to just $1 billion.
Analysts are divided on the likelihood of Iraq's withdrawal. Some experts believe that given Baghdad was the birthplace of OPEC in 1960, Iraq is unlikely to leave, as such a move, especially following the UAE's exit, could trigger a collapse in oil prices. Saudi Arabia, for instance, could increase its production from $7 million bpd to its capacity of over $12 million bpd. However, others suggest that external pressures, potentially from the US, could be influencing Iraq's stance. Iraqi economists have argued that current quotas stifle the country's export potential, and withdrawing would offer the flexibility needed to compete globally and address budget deficits.
