Iraq Seeks Significant Output Quota Increase During OPEC+ Audit

Iraq has requested a significantly larger oil production quota from OPEC, according to a Bloomberg report citing unnamed sources. Baghdad is seeking a daily production baseline of 6 million barrels of crude, a substantial increase from its current rate of 3.37 million barrels daily as of August. This figure represents a marked improvement, with August's average being higher than July's 2.77 million barrels daily.

Iraq's Prime Minister has also expressed a goal to boost oil production to between 8 and 10 million barrels daily over the next six years, even in the face of war-related disruptions. Prior to the conflict, Iraq's daily production was around 4 million barrels. The nation has dispatched a delegation to Saudi Arabia to negotiate a higher baseline for production quotas within OPEC.

Iraq's oil exports have been severely impacted by Iran's closure of the Strait of Hormuz, Iraq's main crude export route. While exports have begun flowing through Hormuz again at approximately 2 million barrels per day, they remain significantly below pre-war levels, especially in recent weeks following renewed conflict between the United States and Iran.

Iraq has received a special exemption from Iran, allowing tankers carrying Iraqi crude to pass through the Strait of Hormuz. However, it remains unclear whether the exemption applies to all tankers or only certain ones. Despite this, Iraqi crude shipments have rebounded due to the exemption, but the country has had to offer substantial discounts to buyers to sell its oil.

The situation has been complicated by the Hormuz blockage, requiring Iraq to offer discounts to attract buyers.