Iraq’s potential departure from OPEC could trigger uncoordinated production, pressuring Brent below $50 for the first time since COVID.
Iraq’s threat to leave OPEC if output restrictions persist removes the cartel’s sixth-largest producer from supply controls, deepening fractures after the UAE’s May exit. Analysts warn uncoordinated production could push Brent below $50, a level last seen during the 2020 pandemic collapse.
Brent crude has already fallen from a March peak of $115 to around $75, nearing pre-war levels. OPEC+ fragmentation adds downward pressure, with Saudi Arabia’s 2 million barrels of spare capacity offering limited leverage to stabilize prices without risking further declines.
The shift underscores OPEC+’s diminished role as a swing producer, challenged by US output growth and geopolitical strains. The Iran war has exposed vulnerabilities in Gulf supply coordination, accelerating the cartel’s structural decline.