Iraq seeks quota review as OPEC restores output allocations

Iraq’s Oil Ministry says that OPEC has begun gradually restoring Iraq’s pre-war production allocations, a move it said would strengthen Iraq’s output capacity and support the recovery of its oil sector.

In a statement carried by the state news agency, the ministry says Baghdad supports a reassessment of OPEC production quotas to better reflect member states’ conditions, including Iraq’s economic and security circumstances.

Iraq’s Prime Minister Ali Faleh al-Zaidi had not discussed the possibility of Iraq leaving OPEC, the statement added.

On Thursday, sources with knowledge told Reuters that Iraq, OPEC’s second-largest producer after Saudi Arabia and one of its five founding members, has considered leaving the group if the oil producer group does not allow Baghdad to significantly increase oil production.

Such a prospect would be a serious blow to the Organization of the Petroleum Exporting Countries, which saw the United Arab Emirates walk away less than two months ago.

The country relies on oil for the bulk of its income, which has been slashed since the Iran war effectively blocked exports via the Strait of Hormuz.

Later on Thursday, Iraq’s oil ministry said that reports suggesting Baghdad was considering ending its membership in OPEC did not reflect the Iraqi government’s official position.

Iraq’s quota for July is 4.378 million barrels per day, though, current output is significantly below this because of the Hormuz disruption.