Iraq Seeks Higher Oil Quota to Fuel Ambitious Production Plans

Iraq's Prime Minister Ali al-Zaidi has set an ambitious goal to more than double the country's oil production within six years, targeting output of between 8 million and 10 million barrels per day. To achieve this, Baghdad needs OPEC to grant it a higher production quota, but even if that happens, the country still faces significant infrastructure challenges. Iraq currently produces roughly 4 million bpd, down from pre-war levels due to disruptions caused by Iran's effective closure of the Strait of Hormuz. The country has managed to push exports through Hormuz back up to around 2 million bpd this month, but traffic remains below pre-war levels.

Al-Zaidi said Iraq plans to expand exports through Turkey's Ceyhan port while pursuing new routes through Syria's Baniyas and Jordan's Aqaba. The existing Iraq-Turkey pipeline currently moves only about 170,000 bpd. A proposed pipeline to Syria would provide another route around Hormuz but construction could take four years and cost at least $15 billion.

Iraq has already seen an increase in demand for its oil, with China recently purchasing 8 million barrels of Basrah Heavy and Basrah Medium crude. OPEC+ has hired DeGolyer and MacNaughton to independently assess the maximum sustainable production capacity of most members, including Iraq. The consultancy is expected to submit its findings by the end of September, kicking off negotiations over production baselines for 2027.