Iraq Seeks OPEC Quota Hike Amid War-Related Disruptions

Iraq has asked OPEC to significantly increase its crude oil production baseline for future quotas. According to Bloomberg, Baghdad wants its future quotas set on a daily production baseline of 6 million barrels of crude, substantially higher than its current rate of around 3.37 million barrels per day in August.

The country's Prime Minister has stated that Iraq will seek to boost oil production to between 8 and 10 million barrels daily within the next six years, despite ongoing disruptions from the war. Before the conflict began, Iraq was producing some 4 million barrels daily.

Despite Iran's effective closure of the Strait of Hormuz, historically Iraq's primary crude export route, the country has managed to push exports through the chokepoint back up to around 2 million bpd last month. However, traffic remains below pre-war levels, especially in the past week after the US and Iran began fighting again.

The Iraqi government received a special exemption from Iran to allow tankers carrying Iraqi crude to pass through the Strait of Hormuz, resulting in a rebound in flows out of the Persian Gulf. Nevertheless, Iraq has had to offer buyers substantial discounts to place its crude due to the Hormuz blockage.