Iraq is weighing a potential exit from OPEC if the cartel fails to raise its production quotas, according to a new report. The country, currently the group’s second-largest producer, has seen its economy strain under the weight of a prolonged financial crisis tied to the Iran war.
Nearly all of Iraq’s oil exports pass through the Strait of Hormuz, a critical chokepoint that became nearly impassable for months during the conflict. The disruption slashed production to almost zero, crippling state revenues and forcing officials to reconsider their long-standing alliance with the organization.
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A senior official in Iraq’s oil ministry warned that Saudi Arabia and other OPEC members should take the demand seriously. “Failing that, Iraq will be compelled to consider all available options,” the official said, hinting at a possible departure if quotas remain unchanged. Reuters reported that while Iraq’s current preference is to remain within the cartel, the threat of withdrawal shows the depth of its frustration with the existing limits on output.
Government spokesperson Haider al Aboudi confirmed that Iraq is pushing to rebuild its export capacity, with plans to lift output to 7 million barrels per day in the coming years. The target reflects a broader effort to regain stability after months of reduced shipments. Restoring pre-conflict production levels is seen as essential for reviving Iraq’s fiscal health, given the heavy reliance of its budget on oil revenues.
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OPEC has already lost one major member this year. In May, the United Arab Emirates announced its exit, citing disagreements over production limits and a shift in its long-term energy strategy. The move followed months of tension, as the UAE sought greater flexibility in managing its own output. The decision was not sudden; speculation had circulated for some time as Abu Dhabi signaled dissatisfaction with the constraints imposed by the group’s collective policies.
In a statement, the UAE framed its departure as part of a “strategic and economic vision,” emphasizing its commitment to responsible energy markets. The country pledged to ramp up production gradually, aligning new supply with global demand to avoid market shocks. The announcement, carried by the state-run WAM news agency, stressed that the UAE would continue to play a constructive role in global energy stability, even as it pursued a more independent path.
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Iraq’s potential exit adds to the growing pressure on OPEC as members reassess their roles amid shifting geopolitical and economic conditions. The cartel now faces the challenge of balancing internal demands with the need to maintain cohesion in an increasingly fragmented energy market. The UAE’s departure and Iraq’s warnings signal a broader trend of major producers prioritizing national interests over collective discipline, testing the organization’s ability to adapt to a rapidly changing setting.
