Iraq has delivered a firm message to OPEC: either increase Baghdad's oil production quota or risk the departure of another member. This stance puts additional pressure on the already weakened cartel, which is still recovering from the United Arab Emirates' exit.
According to a recent report, Iraqi Oil Ministry spokesman Salim Al-Rikabi stated via text message on Thursday that Iraq "currently has no intention of withdrawing from OPEC." However, he simultaneously warned that if OPEC does not raise Iraq's production ceiling, the country "will be forced to decide whether to remain in or leave OPEC." This statement immediately caused ripples in the market.
Within hours, however, the Iraqi Oil Ministry issued a statement to downplay the situation, clarifying that "reports about Iraq considering terminating its OPEC membership do not represent the official position of the Iraqi government. Neither the Prime Minister nor the government has proposed leaving the organization."
This contradictory messaging comes as Middle Eastern countries accelerate production increases following the conclusion of the Iran war. Market observers are concerned that if Iraq ultimately follows the UAE's lead and leaves OPEC, it would further undermine the group's ability to support oil price floors and exacerbate global crude supply glut pressures.
OPEC Faces Another Centrifugal Force After UAE's Exit
Iraq's threat comes roughly two months after the UAE's formal departure from OPEC.
The UAE left the organization in April of this year, citing a fundamental conflict between its expanding capacity target—aiming to increase production to 5 million barrels per day by 2027—and OPEC's quota framework. At the time of its exit, the UAE's production was approximately 4.05 million barrels per day, making it a significant member within OPEC.
Following the UAE's departure, OPEC currently consists of 11 member countries: Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, and Venezuela. Another departure by Iraq would deal another major blow to the cohesion of the organization.
Iran War Severely Damages Iraqi Finances, Fuels Urgent Need for Higher Production
The report indicates that the core motivation for Iraq seeking a higher production quota is to compensate for oil revenue losses incurred during the Iran war. This conflict caused unprecedented disruption to oil supplies from the Persian Gulf region, with Gulf states losing millions of barrels in sales. Iraq's fiscal situation was particularly hard hit.
OPEC gradually allowed member countries more production leeway during the war, but Iraq believes the existing quotas still fail to adequately reflect its actual production capacity and fiscal needs. Al-Rikabi explicitly stated in the declaration that Iraq is advancing plans to increase production to match its capabilities and requirements and is demanding that OPEC correspondingly raise its production level.
Mixed Signals May Be a Pressure Tactic in Quota Negotiations
Analysis suggests that Iraq's tactic of "issuing a threat and then retracting it" coincides with a critical juncture where OPEC and its partners are assessing the technical capacities of each member and setting production targets for next year. The timing is noteworthy—floating the possibility of withdrawal could be a pressure tactic by Baghdad to secure a higher target in quota negotiations.
Meanwhile, as Middle Eastern oil producers collectively accelerate production increases post-Iran war, market worries about a supply glut are intensifying, putting downward pressure on oil prices. In this context, if centrifugal tendencies within OPEC spread further, the organization's ability to coordinate production and stabilize prices will face greater skepticism. For oil market investors, this uncertainty warrants continued attention.
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