Iraq piles pressure on OPEC over quota dispute after UAE exit
An Iraqi worker adjusts a control valve at the Daura oil refinery in Baghdad, Iraq. Iraq and a group of US and European oil companies Exxon Mobil Corp and Royal Dutch Shell PLC have signed a $50 billion contract to develop the Western Qurnah oil field; This comes after Iraq Southern Petroleum Company signed a technical services contract with Britain’s BP and China’s CNPC to develop the Rumaila oil field.
Muhannad Fela’ah | Getty Images News | Getty Images
Iraq wants OPEC to significantly increase the country’s oil supply quota and will consider leaving the cartel over the dispute, Baghdad said on Thursday.
Iraq, the group’s second-largest oil exporter, has significant influence over OPEC, whose third-largest producer, the United Arab Emirates, exited in April.
This came after Reuters reported that Iraq was weighing leaving the cartel and Bloomberg quoted a former Iraqi ministry spokesman warning that if oil quotas were not lifted “a decision will have to be made about whether to stay or withdraw.”
Iraq’s oil ministry said later on Thursday that reports suggesting Baghdad could end its membership in OPEC “do not reflect the official position of the Iraqi government” but continued to emphasize the importance of reviewing oil production quotas.
Neither the Iraqi ministry nor OPEC were immediately ready to respond directly to requests for comment from CNBC.
Iraq’s economy is heavily dependent on oil, and its dependence on exports via the Persian Gulf has emerged since the United States and Israel began war with Iran on February 28.
In June, the Iraqi cabinet approved plans to accelerate crude exports through the Kurdistan-Türkiye pipeline network; This would more than triple current shipments from 220,000 barrels per day to 770,000 barrels per day.
The route offers an alternative passage via Kurdistan to Türkiye’s Mediterranean port of Ceyhan. When operating at full capacity, it is expected to provide relief to the oil-dependent Iraqi economy, which will contribute 53% to real GDP by 2025, according to the World Bank.
Exclusive data shown to CNBC by economic intelligence provider QuantCube Technology reveals that Iraq’s overall exports have been nearly depleted since the start of the war as a result of its geographic dependence on Hormuz.
QuantCube’s indicator provides an estimate of the weight of cargo ships are carrying by measuring the volume of deadweight tonnage leaving Iraq and UAE ports.
