Iraq threatened to exit OPEC on June 25, 2026, unless granted a higher production ceiling, a demand quickly retracted but highlighting deep fractures within the group. This move follows recent departures by Qatar, Ecuador, Angola, and the UAE, with Iraq, as OPEC's second-largest producer and a founding member, presenting a significant challenge.
Baghdad's position is driven by severe fiscal pressure, as oil accounts for approximately 90% of its revenue, and current quotas limit post-war recovery, especially after the Strait of Hormuz closure severely impacted April export revenue, which fell to about 1.087 billion dollars from 6.8 billion in February. The dispute centers on Iraq's ambition to raise output towards 7 million barrels per day from its current 4.378 million bpd ceiling. OPEC+ faces a dilemma: granting Iraq's request risks accelerating a market surplus and inviting similar demands, while refusal could push another major producer out. Saudi Arabia may opt for flexible quotas to preserve the coalition, confirming it now manages decline rather than dictating price. This reordering suggests cheaper oil for importing economies but erodes spare capacity, increasing market vulnerability to shocks.
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