Iraq has reduced its crude oil production as part of its compliance with OPEC regulations. In May, the country’s federal crude output decreased by 59,000 barrels per day (b/d) from the previous month, settling at 3.605 million b/d.
This retreat in production aligns with Iraq’s initiative to make up for past overproduction, as confirmed by a senior official from the state-run oil marketer, SOMO, on June 2. As an integral member of OPEC, Iraq’s oil production quota was raised by 49,000 b/d to 4.049 million b/d in May, as part of a collective effort by eight countries to gradually reintroduce a total of 2.2 million b/d of crude into the market.
However, this increase is paired with Iraq’s commitment to underproduce its quota by 140,000 b/d in May, a measure outlined in OPEC’s compensation plan released in April. The overall production from Iraq, including the semi-autonomous Kurdistan region, was around 3.805 million b/d in May, exceeding the OPEC quota by 244,000 b/d, positioning Iraq to meet its compensation goals well ahead of the June 2026 deadline.
To ensure adherence to its OPEC obligations, the Iraqi government has limited crude exports below 3.2 million b/d for May and June. Federal crude exports for May stood at 3.161 million b/d, a decline from 3.255 million b/d in April.
Additionally, domestic refinery consumption witnessed a nominal rise due to various operational factors, including maintenance issues at some facilities. Amid these adjustments, Iraq has leveraged increased condensate production and blending with crude for export, facilitating its path toward compliance.
Enhanced monitoring of the changing characteristics of Iraq’s Basrah Medium crude by Asian refiners is also noteworthy, as blending efforts make the crude lighter and potentially more appealing to markets.