Oil & Gas

Iraq is aiming to more than double its oil production within the next six years, targeting between 8 million and 10 million barrels per day (bpd), compared with around 4 million bpd before the Iran war. However, Baghdad first needs OPEC to approve a significant increase in its production quota.

Iraq has sent its oil and finance ministers to Saudi Arabia to push for a higher OPEC quota. Meanwhile, OPEC+ has hired DeGolyer and MacNaughton to assess the sustainable production capacity of most member countries, including Iraq. The results, expected by the end of September, will help determine production baselines for 2027.

Even with a higher quota, Iraq faces major challenges in exporting additional crude. The country has been heavily affected by disruptions in the Strait of Hormuz, its main export route. Baghdad plans to increase shipments through Turkey’s Ceyhan port and develop alternative routes through Syria’s Baniyas and Jordan’s Aqaba. However, the existing Iraq-Turkey pipeline is currently carrying only about 170,000 bpd, while a proposed pipeline to Syria could take four years to build and cost at least $15 billion.

These limitations mean Iraq’s ambitious production target will require major investment in both oil production and export infrastructure. As Middle Eastern supply routes remain disrupted, China is already increasing its purchases of Iraqi crude, including recent purchases of around 8 million barrels of Basrah Heavy and Basrah Medium.