European officials are expected to visit Baghdad in the coming weeks for high-level talks on energy cooperation, just hours after Iraq warned it could leave OPEC unless the producer group grants the country a higher production quota.
According to Iraqi sources cited by Shafaq News, the discussions will focus on expanding cooperation across Iraq’s oil, gas and electricity sectors. Planned talks include projects to capture associated gas, increase power generation, expand energy storage capacity and strengthen crude export infrastructure.
One proposal under discussion aims to help Iraq achieve self-sufficiency in associated gas production within two years, reducing its dependence on imported fuel.
Iraqi officials are also expected to discuss plans for a joint maritime fleet with several countries, including the United States, to support crude oil exports.
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The diplomatic push comes after Iraqi Oil Ministry spokesman Salim al-Rikabi warned that Baghdad could withdraw from OPEC if the group refuses to raise the country’s production quota to better reflect its production capacity and long-term development plans.
According to market analyst Jules Reimer, writing for MarketWatch, Iraq’s departure would carry far greater consequences than the exits of Qatar in 2019 and the UAE earlier this year because Iraq is OPEC’s second-largest producer after Saudi Arabia, pumping roughly 4.5 million barrels per day.
Reimer noted that estimates from the U.S. Energy Information Administration suggest Iraq could increase production capacity to around 7 million barrels per day by 2029 if OPEC production limits were removed.
This would create significant opportunities for international oil companies with operations in Iraq, including Exxon Mobil, Chevron and Halliburton, while also dealing a major blow to OPEC’s credibility. As one of the organization’s founding members, Iraq’s departure would raise new and deeper questions about the cartel’s ability to influence global oil prices.
By Michael Kern for Oilprice.com
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