Iraq does not intend to leave Opec, but it will consider doing so if demands for a higher production quota are not met, the country's Oil Ministry has said.
“There is currently no intention for the ministry to withdraw from Opec, and we remain committed to working within the organisation’s mechanisms,” the ministry's spokesman Salim Al Rikabi said on Thursday.
Mr Al Rikabi added that Iraq is moving ahead with plans to raise its oil production to match its capacity and national needs. He said the ministry expects Opec to increase Iraq’s production quota accordingly.
“If that does not happen, there will be a decision regarding staying in or exiting the organisation,” he said.
Iraq is Opec’s second-largest producer and has repeatedly pushed for a higher quota, arguing that its output potential and postwar reconstruction needs justify an increase above current limits.
The country depends on oil for at least 90 per cent of its income, which has been slashed since the Iran war effectively blocked exports via the Strait of Hormuz. That has put the government in a tight financial spot.
No timeline was given for a potential decision on membership.
Later on Thursday, the Iraqi Oil Ministry issued a clarification, stating that reports suggesting Baghdad was planning to leave Opec “do not reflect the government’s official position”.
“Iraq has consistently emphasised the need to reassess production ceilings to align with the sustainable production capacities of member states, in line with agreement endorsed by all parties and understandings of Iraq’s security and economic circumstances,” it said.
The ministry noted that Opec and its allies had already responded by launching a process to reassess the maximum sustainable production capacity of member countries.
That review is “under way in co-ordination with an independent international consultancy, with Iraq participating actively according to the agreed timeline”, the statement added.
Opec+ has also begun gradually returning previously cut volumes, with all voluntary reductions scheduled to be unwound in the coming months – a step expected to raise Iraq’s effective production ceiling, it said.
The statement stressed that any issues related to production ceilings or capacity levels should be handled through the technical and consensus-based mechanisms within Opec+.
“The member states have shown a high-level understanding of Iraq’s situation, acknowledging more than four decades of wars, sanctions, and attacks that have damaged its oil infrastructure,” it said.
It said this context “would be taken into account to ensure Iraq’s output reaches a fair level, allowing it to regain its position as the bloc’s second-largest producer and to advance projects critical to the oil sector, which remains the main source of state revenue”.
Iraq pumped 1.48 million bpd in May, according to Opec data, down from almost 4.2 million bpd in February before the closure of the Strait of Hormuz. Iraq's quota for July is 4.378 million bpd though current output is significantly below this because of the Hormuz disruption.
The prospect of Iraq leaving would be a serious blow to the Opec, which saw the UAE walk away less than two months ago. Iraq is one of its five founding members. Opec was formed in the Iraqi capital in 1960.
The UAE left the group on May 1, citing a growing mismatch between its rising production capacity and its quotas.
As part of the Opec+ supergroup, the UAE had been producing close to 30 per cent below its capacity of 4.85 million barrels per day.
