Breaking: Iraq Threatens to Withdraw from OPEC

The Iraqi government is considering the option of withdrawing from OPEC membership if the oil producers’ group does not allow Baghdad to significantly increase its oil production quota. The leak of sensitive information from within OPEC’s second-largest producer was confirmed by several sources with direct knowledge of the matter on Thursday. Citing an exclusive Reuters report, senior officials at Iraq’s Ministry of Oil stated that the government is grappling with a severe financial crisis due to the Iran war, which has blocked strategic export routes in the Strait of Hormuz. During this difficult period, Baghdad actually intends to remain within the alliance, but it demands that Saudi Arabia and other OPEC allies treat its proposal for an increased energy supply quota with the utmost seriousness. “Saudi Arabia and other OPEC allies must treat this matter very seriously. If they fail, Iraq will be forced to consider all available options,” a senior Iraqi Ministry of Oil official told the outlet. When pressed on whether the option of leaving OPEC had been thoroughly discussed at the cabinet level, the official stated that such an extreme step was still too early to take at this time. Meanwhile, an Iraqi Ministry of Oil spokesperson immediately released an official statement saying that reports regarding Baghdad’s plan to resign from OPEC do not reflect the official position of the Iraqi government at present. The threat signal from Iraq comes as the OPEC+ alliance, which brings together OPEC countries and Russia, is conducting a comprehensive review of the crude oil production capacity of all members. This capacity assessment will later be used as the baseline reference for production in 2027, which serves as the main benchmark for setting daily quota allocations. Historically, Iraq is one of the five founding countries that established OPEC in the capital city of Baghdad back in 1960. The country’s withdrawal would be the second major blow to OPEC after the United Arab Emirates decided to leave the alliance less than two months ago. Based on internal data, Iraq’s official quota for July is set at 4.378 million barrels per day. However, actual output plummeted to just 1.48 million barrels per day in May due to logistical obstacles following the closure of the Strait of Hormuz. The Iraqi government asserts that it is focusing on restoring all oil shipping infrastructure facilities to quickly return to full export capacity. Prime Minister Ali al-Zaidi, who has been in office since May, stressed that rebuilding the economic foundation and attracting foreign investment will be the main agenda of his administration, including urging OPEC to provide a fair quota according to the size of its population. “Iraq is working to restore its full oil export capacity and aims to increase oil production to 7 million barrels per day over the next few years,” explained Iraqi government spokesperson Haider al Aboudi. Although Saudi authorities and OPEC leadership have chosen to remain silent, a Russian oil industry source assessed that this political bluff from Baghdad will not pose a major threat capable of damaging the OPEC+ draft agreement. The Russian side believes that granting a slight additional quota leeway for Iraq could actually help maintain the alliance’s internal balance, as global oil prices briefly moved down below the level of US$73 per barrel shortly after the internal Iraqi report was leaked to the public.