Iraq is reportedly pushing for a significant boost to its crude production quota within the OPEC+ framework, according to sources familiar with the matter. The move comes as the alliance conducts a capacity review of member states to set output targets for the coming year.

As the second-largest producer in the OPEC+ coalition, Iraq is seeking to base its future production limits on a benchmark of 6 million barrels per day, a substantial jump from its current allocation. The discussions are confidential, and the sources spoke on condition of anonymity, while Iraq's oil ministry did not respond to requests for comment.

The country, which witnessed the founding of OPEC six decades ago, hinted in June that it might leave the organization if it fails to secure a sufficiently high baseline quota. Such a departure could deliver a major blow to the OPEC+ alliance, which has already been shaken by the exit of another key Gulf member, the UAE.

Where the assessment stands

OPEC and its partners have commissioned external consultancies to evaluate the actual maximum production capacity of each member nation, aiming to align quotas more closely with real-world capabilities. The assessment is expected to be completed by the end of this month, with approval slated for the oil ministers' meeting in late November.

The outcome of this review carries weight for the global oil supply-demand balance, especially if Persian Gulf crude exports disrupted by the Iran conflict return to normal, potentially reigniting a supply glut. It also holds major implications for energy giants like Chevron Corp (NYSE: CVX) and Exxon Mobil Corp (NYSE: XOM), which are negotiating their return to Iraq. Furthermore, the results will be pivotal for unity within OPEC itself.

The broader context

Meanwhile, Venezuela, another founding member, faces a critical decision as it weighs whether to exit the organization following a landmark agreement with US President Donald Trump that grants Washington considerable control over a portion of its oil reserves. Iraq's officials have previously voiced their ambitions publicly. In May, Oil Minister Basim Mohammed Khudair stated that Baghdad was in talks with OPEC to raise output to 5 million barrels per day after the Iran conflict concludes. Prime Minister Ali Al-Zaidi announced this month that the country aims to boost production to around 10 million barrels per day by 2030.

Whether the 6 million barrels per day benchmark will gain acceptance remains highly uncertain. Under current arrangements, Iraq's output ceiling under OPEC+ is set at 4.431 million barrels per day for September and October. The International Energy Agency in Paris estimates Iraq's sustainable total capacity at roughly 4.9 million barrels per day. However, actual production has fallen well below these levels due to disrupted crude shipments through the Strait of Hormuz amid the Iran conflict, with compiled data showing daily output of just 2.98 million barrels in August.