Iraq to seek increased oil quota

Reuters reports that a delegation from Iraq has travelled to Saudi Arabia to make the case for increasing its OPEC+ output quota.

Ali al-Zaidi, Iraq’s prime minister, has announced plans to double its capacity to 8–10 million barrels per day (bpd) over the coming six years. Iraq’s output stood at around 4 million bpd before the Iran War. With its current quota having been determined by its current capacity, it needs to either secure a higher quota or leave OPEC+ entirely. DeGolyer and MacNaughton have been independently commissioned by OPEC+ to reassess how much crude oil members can sustainably produce.

When the findings of this are submitted, negotiations will begin on deciding baseline production levels for next year. These can be fraught because the baselines are used to decide production quotas for the OPEC+ deal.

Iraq has successfully attracted international oil companies like BP, Chevron and TotalEnergies, the makers of the Castrol, Texaco and Total lubricant and grease products respectively. Together with its state-owned oil companies, it could increase production but faces obstacles in getting oil to market even if it manages to secure a higher quota.

Infrastructure will be a major challenge, given the country’s exports have been significantly affected by the disruption in the Strait of Hormuz. Prime Minister al-Zaidi said the country was looking at increasing exports through the Ceyhan port in Turkey, which currently transports 170,000 bpd. There are also plans to begin exports through ports in Jordan and Syria, with a pipeline to the latter reportedly costing $15 billion.

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