Iraq Production Falls to 1.48 mb/d as Baghdad Weighs OPEC Exit After UAE Departure

Iraq produced 1.48 million barrels per day in May 2026, according to OPEC data, a 65 percent decline from its pre-war output of 4.2 million barrels per day. The Middle East conflict, which erupted in late February, closed the Strait of Hormuz and cut off Iraq's main export route. At Brent crude prices of $73.41 per barrel on June 25, per Trading Economics, that production gap represents roughly $200 million in foregone export revenue each day. Baghdad has now warned that if OPEC does not raise its production quota, the country will weigh leaving the cartel.

The threat carries weight because Iraq is OPEC's second-largest producer and one of the organization's five founding members. A departure would follow the United Arab Emirates, which walked out of OPEC on May 1, 2026, citing a mismatch between its rising production capacity and permitted output ceilings. As Oil Authority reported on June 24, Brent prices fell as Hormuz reopening talks advanced, compressing the oil revenues Iraq needs to fund post-war reconstruction. Iraq's Oil Ministry spokesperson Salim Al-Rikabi stated that OPEC must raise Iraq's output ceiling or a decision will have to be made about whether to stay or leave.

Production Collapse and the Daily Revenue Math

Before the conflict, Iraq pumped approximately 4.2 million barrels per day and exported 3.5 million barrels per day through the Strait of Hormuz. By May, OPEC's own data showed actual output had fallen to 1.48 million barrels per day. The production gap of 2.72 million barrels per day, multiplied by Thursday's Brent price of $73.41, produces a daily revenue shortfall of roughly $200 million, or approximately $6 billion per month. Iraq relies on oil exports for more than 90 percent of government revenues, giving the quota dispute an urgency that Baghdad has made clear to OPEC counterparts.

Baghdad is pushing for a post-ceasefire quota of 4.22 million barrels per day, the figure OPEC has discussed for the September to December period. Iraq's longer-term ambition is 7 million barrels per day, a target that would require sustained infrastructure investment that only oil revenues can fund. The financial pressure is compounding: every month Iraq produces at 1.48 million barrels per day instead of its demanded quota, it foregoes roughly $6 billion in gross export earnings at current Brent prices.

UAE Departure Sets a Precedent

The United Arab Emirates was OPEC's third-largest producer before it left the cartel on May 1. Abu Dhabi cited the same logic that Baghdad is now invoking: production capacity has grown faster than the quota has risen. The UAE's departure weakened OPEC's claim to represent the world's leading oil exporters, and an Iraqi exit would inflict further institutional damage. OPEC responded by launching a formal process to reassess each member's production capacity, but no quota increase has been confirmed as of June 25.

Iraq's Oil Ministry also issued a contradictory official statement on Thursday, saying the country has no intention of withdrawing and remains committed to OPEC's mechanisms. The formal denial, paired with Al-Rikabi's conditional warning, is the pressure tactic OPEC members use before quota negotiations. No timeline has been set for a final decision, according to sources cited by Bloomberg and Arab News.

Al Basrah Oil Terminal: Iraq's Export Chokepoint

Iraq's exports flow almost exclusively through the Al Basrah Oil Terminal, an offshore loading facility 30 miles off the Iraqi coast in the Persian Gulf. The terminal can host four supertankers simultaneously and, at peak capacity, loads more than 1.5 million barrels per day. A second facility, the Khawr Al Amaya Oil Terminal, handles backup capacity for lighter crude grades. Both terminals operate under the State Organization for Marketing of Oil, Iraq's national oil marketing body, which reports the production and export data OPEC incorporates into its assessments. SOMO's throughput figures will be the first real-time indicator of how quickly Iraq's output recovers as Hormuz reopens.

OPEC Faces a Structural Test

OPEC now faces a structural problem. The UAE is gone. Iraq, its second-largest producer, is threatening to follow. Saudi Arabia, which holds roughly 40 percent of OPEC's remaining quota capacity, cannot hold the group together indefinitely if major members see output ceilings as a burden. As Oil Authority reported on June 23, analysts at Goldman Sachs and Wood Mackenzie are already split on the pace of post-conflict supply recovery, adding further uncertainty to any new quota framework. Iraq's position is not expected to ease until Baghdad receives a firm higher ceiling from OPEC.