Iraq sets ambitious target to more than double oil production by 2032

In an ambitious bid to transform Iraq's oil landscape, Prime Minister Ali Al Zaidi has set an audacious goal to more than double the nation's oil production to seven million barrels per day by 2030. This figure is set to soar to ten million barrels per day by 2032, with a portion of the increase originating from the Kurdistan region. Iraqi oil exports reached approximately 3.4 million barrels per day in October, showcasing a promising recovery post the disruptions caused by the Iran war.

During a meeting with Kurdistan Region Prime Minister Masrour Barzani in Baghdad, Mr Al Zaidi emphasized that this significant escalation in production would have a positive ripple effect on the country's development and economy. Iraq has been advocating for higher production rates within Opec countries, as the ongoing Iran war and the influx of investments from major oil producers are putting pressure on Baghdad to augment output.

The conflict has severely impacted Iraq, compelling major export cuts and diminishing the state's oil revenue, which typically constitutes around 90% of government income. Oil Minister Basim Mohammed Khudair confirmed that Iraq is engaged in discussions with Opec to augment exports, citing the unique circumstances and challenges Iraq has faced over the past five decades. He believes Iraq "deserves to increase its production rates" to generate revenue for infrastructure and government initiatives.

The production quota allocated to Iraq by Opec currently stands at 4.431 million barrels per day. Prior to the onset of the Iran war, Iraq was producing around 4.4 million barrels per day. However, production and exports plummeted sharply following disruptions in the Strait of Hormuz, plummeting from 3.36 million barrels per day in February to a mere 131,000 barrels per day in April.

This led to a sharp decline in monthly oil revenue, which had previously averaged approximately $7 billion. However, Iraqi oil exports rebounded in October, hinting at a potential revival in the sector.

To back this ambitious target, Baghdad has been actively pursuing oil and gas deals worth billions of dollars, primarily with US companies such as Chevron, HKN Energy, and Halliburton. Additionally, Iraq is exploring new export routes to mitigate its dependence on the Strait of Hormuz, including pipelines to Syria's Baniyas port on the Mediterranean, Jordan's Aqaba port, and an Iraq-Turkey pipeline to Ceyhan.