Iraq is seeking a higher oil production quota from OPEC as it looks to recover from war-related economic losses and capitalise on major investments by international energy companies.
The country, OPEC’s second-largest producer, has seen state revenues come under pressure after the conflict with Iran disrupted oil exports through the Strait of Hormuz, which handles most of Iraq’s crude shipments.
An Iraqi energy adviser told Reuters that Baghdad’s request reflects growing financial pressures caused by export disruptions and losses during the conflict. The adviser said higher production would help the country rebuild its economy and increase government revenues.
Although sources told Reuters last week that Iraq had considered leaving OPEC if its quota was not increased, Prime Minister Ali Faleh Al-Zaidi said on Friday that no such discussions had taken place.
Iraq’s case has been strengthened by a series of major investment agreements signed with international oil companies since early 2025. BP has committed up to $25 billion to redevelop oil fields in Kirkuk, while TotalEnergies is moving ahead with a $10 billion project in Basra. ExxonMobil has agreed to develop the Majnoon oil field, and Chevron is also considering returning to Iraq.
Oil remains the backbone of Iraq’s economy, accounting for 88% of government revenue last year, according to World Bank data. By comparison, Saudi Arabia relied on oil for around 55% of its government income.
OPEC data showed Iraq’s oil production fell to 1.48 million barrels per day in May from nearly 4.2 million barrels per day in February, reflecting the impact of export disruptions.
The International Energy Agency estimates Iraq has the capacity to produce 4.9 million barrels per day, exceeding its July OPEC quota of 4.378 million barrels per day. Iraqi officials have also outlined plans to increase production capacity to 7 million barrels per day over the coming years.
However, analysts caution that achieving those targets will require significant investment in export infrastructure and overcoming regulatory, security and political challenges that have delayed previous expansion plans.
Prime Minister Al-Zaidi, who took office last month, has made economic recovery and foreign investment central to his agenda. He is expected to visit Washington in mid-July, where he has said US companies interested in investing in Iraq will be given priority.
