Iraq is pushing OPEC+ for a substantial increase in its oil production quota, driven by the need to recover lost revenue from the Iran war and to fund its post-conflict economic reconstruction. The country has faced significant economic hardship, with oil revenues accounting for 88% of its government income last year, a higher reliance compared to Saudi Arabia's 55%.
Iraq aims to increase its oil production to between 8 million and 10 million barrels per day within the next six years, a target significantly higher than its current output. This ambition is supported by renewed investment from major oil companies like BP, TotalEnergies, ExxonMobil, and Chevron, which have committed billions of dollars to redevelop oil fields. However, experts like Mercedes McKay from Energy Aspects caution that achieving 7 million barrels per day faces substantial headwinds due to infrastructure and export constraints.
Currently, Iraq's capacity is estimated at 4.9 million barrels per day, which is over 500,000 barrels per day more than its July OPEC quota of 4.378 million barrels per day. The country's August exports were reported at around 2.3 million barrels per day, a sharp increase from July's 1.35 million barrels per day. Iraq has previously suggested an exit from OPEC if its demands for a fair quota are not met, though a subsequent statement retracted this immediate threat, emphasizing instead the recognition among OPEC members of Iraq's unique challenges over the past four decades.
The push for a higher quota comes as OPEC+ paused further production increases in September, maintaining October requirements at September levels. Iraq's desire for a larger share of output is rooted in its conviction that it deserves to capitalize on its oil resources to rebuild its economy, especially with the Strait of Hormuz now unblocked after a U.S.-Iran peace deal, leading to a surge in supply and a drop in oil prices.
