By Ahmed Rasheed and Sarah El Safty DUBAI, June 29 An economic crisis caused by the Iran war and a fresh surge of investment by oil majors are driving Iraq’s aggressive push for a higher OPEC production quota, potentially placing it on a collision course with the producer bloc.
The pressure from Baghdad adds to the challenges confronting the Organization of the Petroleum Exporting Countries, still reeling from the conflict’s fallout and the shock departure of the United Arab Emirates after nearly 60 years as a member
The war, which forced huge export cuts, has aggravated discord among the group’s core Gulf members. Iraq — among OPEC’s five founding members and its second-biggest producer — took a major economic hit as the oil proceeds accounting for the bulk of state revenues dried up. “Iraq’s demand for a larger OPEC quota is primarily a response to mounting economic pressures,” said an Iraqi energy adviser, who declined to be named due to the sensitivity of the issue. “Export disruptions and war-related losses have increased the need for higher production.” With the fragile U.S.-Iran truce now promising to unblock the Strait of Hormuz, Iraq is in a rush to replenish its coffers and considering all available options if its OPEC quota is not significantly increased. It has even weighed leaving the bloc, sources told Reuters last week, though Prime Minister Ali Faleh al-Zaidi said in a statement on Friday it had not discussed such a move.
The conviction that it should be reaping more from its oil resources has been reinforced by a string of multi-billion-dollar deals signed since early 2025 with oil majors that for years shunned Iraq due to its instability. BP has committed up to $25 billion to redevelop four giant fields in Kirkuk. TotalEnergies is executing a $10 billion project in Basra.