Iraq’s ‘1.5 million barrels per day’ oil gap

• Iraq capacity underused
• Billions lost annually
• Eyeing Asian refineries

Iraq, often identified as a major quota violator in the Opec+ group, is pumping nearly 1.5 million barrels per day (bpd) below its production capacity, an oil official has said.

The country has a sustainable output capacity of about 5.5 million bpd but actual crude production is close to 4 million bpd, according to Nizar Al-Shatri, director general of the State Oil Marketing Organisation.

Baghdad is considering investing in Asian refineries and agreeing long-term contracts to market more crude and maximise revenues, according to Al-Shatri, quoted by the Saudi Asharq TV at the weekend.

He put lost revenues at $97 billion in 2024 representing the sale of 1.2 billion barrels of crude.

Iraq has been identified as one of the main culprits in quota violations within Opec+. Lack of discipline was one of the primary reasons for a Saudi-led decision to boost production by 411,000 bpd next month.

In January Iraq was supposed to produce 3.88 million bpd, but according to Opec actual production was 3.99 million bpd.

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Iraqi officials said last year that they were planning to lift output capacity to nearly 6 million bpd, including gas, refining and petrochemicals.

Al-Shatri said Iraq, which controls the world’s fifth largest recoverable oil resources, already sends almost three quarters of its oil exports to Asia, and cited the region’s accelerating demand and expanding refining capacities.

These deals typically allow Iraq to sell crude at official prices, while benefiting from price differentials during market surges – taking 65 percent of the profit, with partners retaining 35 percent. In the case of losses, the foreign partner bears the cost, Al-Shatri said.

“China, India, South Korea, Indonesia and Malaysia remain Iraq’s top crude buyers. Investing in foreign refineries will allow Iraq to secure fixed refining quotas, shielding exports from market volatility,” he said.