Iraq is exploring all options, including potentially withdrawing from OPEC, if the organization does not substantially raise its oil production quota. This comes just months after the United Arab Emirates exited the group to boost its own output. While Iraq's Oil Ministry spokesman Salim Al-Rikabi stated there's no immediate intention to leave, he emphasized that OPEC should increase Iraq's production level to match its capabilities and needs, or a decision will need to be made regarding its membership. This stance is driven by a severe financial crisis in Iraq, exacerbated by disruptions to the Strait of Hormuz affecting its oil exports.
Iraq, a founding member of OPEC and its second-largest producer, views a significant quota increase as crucial for its economic stability. Prime Minister Ali al-Zaidi has publicly called for higher Iraqi oil output, aligning with the country's production capacity and population. Iraq aims to restore full oil export capacity and increase production to 7 million barrels per day in the coming years. Its current output capacity is estimated at around 5 million barrels per day, with projections of growing to over 6 million barrels per day by the end of 2028.
Some analysts suggest Iraq is unlikely to follow the UAE's example and fully withdraw, as such a move could lead to a collapse of oil prices. However, the prospect of Iraq's potential exit is a serious concern for OPEC, especially given Saudi Arabia's ability to significantly increase its own output if constraints are removed. If Iraq were to leave and increase its production, it could contribute to a global oversupply and lower prices, potentially undermining the stability that OPEC seeks to maintain. Iraq has historically pressed for higher quotas, citing its vast reserves and the need for petrodollars to fund post-conflict development.
