Iraq Could Quit OPEC in Bid to Pump More Oil
Iraq Could Quit OPEC in Bid to Pump More Oil What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… OPEC’s second-largest producer, Iraq, is considering exiting the cartel if the organization rejects Baghdad’s plan to boost its oil production quota in line with some of the other members, sources in the Iraqi government have told local news outletShafaq.
Iraq proposes to boost its oil exports to compensate for the losses in production and sales it has incurred since the start of the war, according to Shafaq’s sources.
The federal government is also estimating the impact of Iraq potentially exceeding its production quota in the OPEC agreements, including an expected decline in global oil prices amid higher supply in the near to medium term.
However, “Any decision to increase production or withdraw from OPEC would likely come after Prime Minister Ali al-Zaidi’s planned visit to Washington in the middle of next month,” Shafaq’s sources said.
Iraq has seen the worst of the Middle East crisis as its heavily oil-dependent economy was collapsing with the trickling oil revenues amid the blockage of the Strait of Hormuz.
Iraq has done very little in recent decades to diversify its heavy dependence on oil.
Petroleum sales still account for 90% of revenues for the state budget.
While other producers in the Middle East also depend on oil sales, none is as dependent as Iraq.
Due to the de facto closure of the Strait of Hormuz, Iraq was forced to slash its oil production as its exports from Basra need to transit the world’s most vital oil chokepoint.
The recovery of production in Iraq could turn into a dispute with OPEC if Baghdad pushes to raise its oil production too much above its current quota.
An Iraq exit would be an even bigger blow to the cartel than the abrupt withdrawal of the United Arab Emirates (UAE) earlier this year.
The UAE has clashed with OPEC and OPEC+ producers over output quotas, insisting it should be given a higher production ceiling as it raises its production capacity.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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