Iraq Seeks OPEC+ Production Baseline of 6 Million Barrels Per Day

Iraq is seeking to substantially increase its oil production quota within the OPEC+ alliance, requesting its baseline be set at 6 million barrels per day (bpd), according to a Bloomberg report on Wednesday citing people familiar with the matter. The demand comes as the producer group undertakes a broad review of its members' production capacities.

A Significant Quota Increase

The proposed baseline represents a major jump from Iraq's current OPEC+ production ceiling, which stands at 4.431 million bpd for September and October. The request is being made as OPEC+ assesses the maximum sustainable capacity of each member nation, a process that could realign future production targets across the group.

OPEC+ has reportedly hired external consultants to conduct the capacity assessments. The review is expected to conclude by the end of September, with a formal approval by the group's oil ministers slated for November, according to the report.

Capacity vs. Ambition

Iraq's request faces potential skepticism, as external estimates of its production capabilities are considerably lower. The International Energy Agency (IEA), for instance, pegs Iraq's sustainable capacity at approximately 4.9 million bpd. This discrepancy could become a point of contention during the OPEC+ negotiations.

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Furthermore, Iraq's actual output has recently been well below its current quota. A Bloomberg survey showed the country's average production in August was just 2.98 million bpd, partly due to disruptions affecting its exports.

Context and Potential Tensions

This move by Baghdad could introduce new friction within the oil-producing alliance. Iraq has previously threatened to exit OPEC if it felt its quota was not adequately increased, a stance that highlights the high stakes involved in the capacity review.

A significantly higher baseline for Iraq would shift supply dynamics within the group and could prompt similar demands from other members seeking to increase their market share. The outcome of the review will be closely watched by oil markets for its potential impact on global supply balances.