Key facts
- Iraq aims to increase oil production from approximately 4 million bpd to 8-10 million bpd within six years.
- Baghdad is seeking approval from OPEC for a higher production quota.
- An independent assessment of member production capacity is underway, with findings due by September.
- Iraq is exploring alternative export routes beyond the Strait of Hormuz, including through Turkey, Syria, and Jordan.
- Infrastructure development, including a potential pipeline to Syria, is crucial for achieving production targets.
Iraq has set an ambitious goal to more than double its oil production capacity to between 8 million and 10 million barrels per day within the next six years. However, achieving this target hinges on securing approval for a higher production quota from OPEC+. Prime Minister Ali al-Zaidi dispatched Iraq's oil and finance ministers to Saudi Arabia to present their case for an increased quota.
OPEC+ has commissioned DeGolyer and MacNaughton to conduct an independent assessment of its members' maximum sustainable production capacity, with findings expected by the end of September. This assessment will precede negotiations over production baselines for 2027, which are typically contentious as higher baselines permit greater output.
Even with a potential quota increase, Iraq faces significant infrastructure challenges in exporting the additional barrels. The country has been heavily impacted by disruptions to the Strait of Hormuz, its primary export route. While Iraqi exports through Hormuz have recovered to approximately 2 million bpd, they remain below pre-war levels.
To circumvent these issues, Iraq plans to expand exports through Turkey's Ceyhan port and is pursuing new routes via Syria's Baniyas and Jordan's Aqaba. The existing Iraq-Turkey pipeline currently handles only about 170,000 bpd. A proposed pipeline to Syria, which could bypass Hormuz, is estimated to take four years to construct and cost at least $15 billion. China has increased its purchases of Iraqi crude amid fractured Middle Eastern supply routes.