OPEC to shrink over threat of Iraq exit
LONDON: Iraq has weighed leaving the Organization of the Petroleum Exporting Countries if its oil production quota is not increased, sources told Reuters on Thursday, weeks after the exit of the United Arab Emirates.
Since late 2016, OPEC has worked with Russia and other non-member countries to manage the oil market by setting output quotas. The wider group is known as OPEC+.
Before the Iran war, OPEC+ pumped about half of the world’s oil, but output is currently restricted because the conflict has forced Gulf members to cut production in response to the effective closure of the Strait of Hormuz.
Iraq is the group’s second-largest producer after Saudi Arabia and one of its five founding members. OPEC was formed in the Iraqi capital in 1960.
The country relies on oil for the bulk of its income, which has been slashed since the Iran war effectively blocked exports via the Strait of Hormuz.
The government is grappling with a financial crisis as a result of the war and a significant rise in its OPEC quota should be treated seriously, a senior Iraqi oil ministry official told Reuters on Thursday.
Iraq had considered leaving OPEC, but the current plan was to remain a member and seek a higher quota, he added.
Iraq’s quota for July is 4.378 million barrels per day though current output is significantly below this because of the Hormuz disruption.
“Saudi Arabia and other OPEC allies should treat this matter with the utmost seriousness. Failing that, Iraq will be compelled to consider all available options,” he said.
Asked if they had discussed an OPEC exit, he said: “It’s still premature for this step”.
Iraq’s oil ministry said on Thursday that reports suggesting Baghdad was considering ending its membership in OPEC did not reflect the Iraqi government’s official position.
OPEC and Saudi authorities did not immediately respond to requests for comment.
Iraq pumped 1.48 million bpd in May, according to OPEC data, down from almost 4.2 million in February before the closure of Hormuz.
A government spokesperson said Iraq was working to return to full export capacity, but declined to comment further on its OPEC quota or the possibility of exiting the group.
“Iraq is working to restore its full oil export capacity and aims to raise oil production to 7 million barrels per day over the coming years,” Iraqi spokesperson Haider al Aboudi said.
OPEC was created through the Baghdad Conference in September 1960 by Saudi Arabia, Kuwait, Iran, Iraq and Venezuela.
Its membership grew in the decade that followed, adding Qatar (1961), Indonesia (1962), Libya (1962), UAE (1967), Algeria (1969), Nigeria (1971) and Ecuador (1973).
The following timeline charts OPEC’s fluctuating membership:
June 25, 2026: Iraq? Iraq has weighed leaving OPEC if it is not granted a higher production quota, sources told Reuters, although it currently plans to remain in the group while pushing for an increase.
An Iraqi exit would be a major blow to OPEC, given it is a founding member and was the group’s second-largest producer before the Iran war. Iraq’s oil ministry said that reports suggesting Baghdad was considering ending its membership did not reflect the government’s official position.
The threat comes amid financial strain as the Iran war disrupts Iraq’s oil exports.
May 1, 2026: UAE
The United Arab Emirates announced it was quitting OPEC on April 28, effective May 1, 2026, dealing a significant blow to the group. Sources told Reuters that although the UAE has suspended participation in production quotas from May 1, it remains a member for the remainder of the calendar year and officials have attended some of the group’s meetings since it announced its exit.
January 1, 2024: Angola
Angola left OPEC after a dispute over its OPEC+ output quota.
January 1, 2020: Ecuador
Ecuador left because of fiscal problems, and in a bid to raise its output. It had previously suspended its membership in December 1992 and rejoined in October 2007.
January 1, 2019: Qatar
Qatar said it quit OPEC to focus on natural gas.
2016: Indonesia
Indonesia suspended its membership in early 2009, reactivated it in January 2016, before suspending it again at the group’s November 2016 meeting.
