Global Economy — 2026-06-28

Iraq Threatens to Leave OPEC if Production Quota Not Raised, Following UAE Exit Precedent

BLUFBaghdad's OPEC exit threat is unlikely to produce a formal withdrawal within 90 days, serving instead as leverage to secure a higher production baseline in the 2027 capacity review.

Iraq's Oil Ministry spokesman Salim Al Rikabi warned on June 25 that "a decision regarding staying in or exiting" OPEC would be required if the group does not raise Iraq's production quota 12. Hours later, the ministry issued a clarification stating that reports of a planned withdrawal "do not reflect the government's official position," while reaffirming the quota demand 13. Reuters, citing a senior oil ministry official, reported Baghdad had actively considered an OPEC exit but that the current plan is to seek a higher allocation rather than leave 4. Iraq's July quota stands at 4.378 million barrels per day; actual output fell to 1.48 million bpd in May from 4.2 million in February after the Hormuz closure cut off Persian Gulf exports 14.

Analysis
Baghdad's quota ultimatum is unlikely to yield a formal OPEC exit within the next 90 days. The threat has sharpened Saudi Arabia's calculus on whether to accommodate Iraq's capacity review demands before the 2027 baseline round closes. The same-day ministry walkback and a senior official's characterization of withdrawal as "premature" confirm the threat is negotiating cover rather than policy. With actual output at 1.48 million bpd against a July quota of 4.378 million while Hormuz remains closed, the real contest is over Iraq's 2027 production baseline, set by the ongoing capacity review. High confidence reflects the convergence of two independent primary sources, the official walkback issued within hours, and the capacity review mechanism providing Baghdad a face-saving path without departure.

4 sources