Iraq Targets 10 Million bpd While China Accelerates Basrah Purchases
Baghdad's target to more than double production faces OPEC quota constraints while Chinese refiners absorb displaced Basrah barrels amid fractured Hormuz flows.
China has made recent purchases of at least 8 million barrels of Basrah Heavy and Basrah Medium crude as Middle Eastern supply routes remain fractured following the Iran war, according to reporting published Friday (2026-08-21). The buying reflects a shift in Chinese procurement as Strait of Hormuz traffic runs well below pre-war levels.8
Iraqi exports through Hormuz have clawed back to around 2 million barrels per day this month, but that figure remains far short of pre-war volumes. Baghdad's alternative route options are limited. A proposed pipeline through Syria would bypass the chokepoint, but construction would take at least four years and cost a minimum of $15 billion, timelines that do nothing for near-term supply security.8
Prime Minister Ali al-Zaidi announced Friday (2026-08-21) a target that would transform global supply balances. Baghdad aims to lift production to between 8 million and 10 million barrels per day within six years, more than double the roughly 4 million bpd Iraq produced before the Iran war.8
Getting there requires OPEC cooperation that has not materialised. In late June (2026-06-25), Iraq's Oil Ministry urged the group to reassess production baselines and raise Baghdad's quota, citing wartime damage to the country's oil sector. The ministry denied any plans to leave OPEC, but the gap between Baghdad's stated target and any quota the cartel might plausibly assign remains large.3
The UAE resolved that tension by exiting OPEC altogether. Free of quota constraints, Abu Dhabi lifted output to approximately 3.8 million barrels per day, the highest since April 2020. ADNOC sold around 60 million barrels loading over June to August across its first three tenders, with most volumes flowing to Asia.4,1
TotalEnergies moved to keep Iraqi barrels competitive in Asian markets. Trading sources told Bloomberg in early July (2026-07-03) that TotalEnergies was offering millions of barrels of Basrah Medium and Basrah Heavy for prompt delivery to Asia, and had been looking to charter very large crude carriers capable of moving up to 2 million barrels each.2
Asian appetite has not been unlimited. By late June (2026-06-24), refiners across the region had slowed purchases of Middle Eastern crude after a heavy buying spree over the preceding three weeks. Traders said available crude would need to be significantly discounted to attract additional volumes, and freight costs were too elevated for floating storage to serve as a pressure valve, though land-based storage in the region provides more flexibility.1
IEA data show the broader Gulf supply recovery has been uneven. Saudi Arabia lifted production to 8.24 million barrels per day in July from 7.34 million bpd in June, while total OPEC+ output rose to 34.53 million bpd from 33 million bpd over the same period. That Gulf supply recovery was partly countered by a U.S. crude stock build of 17.4 million barrels, the largest weekly increase since January 2023 per Reuters reporting from mid-August (2026-08-13), which weighed on prices and complicates the case for sustained triple-digit levels.7
ICE Brent crude front-month was priced at $93.60 per barrel as of 2026-08-23, with markets closed for the weekend. Enverus Intelligence Research said in a statement dated Tuesday (2026-08-04) that it is maintaining its Brent forecast at $100 per barrel across the second half of 2026 and through 2027. OPEC+ is widely expected to pause its phased output increases after September, Reuters reported in late July (2026-07-28), which would cap near-term supply additions from the group but does nothing to address Iraq's structural ambitions.6,5,7
Baghdad's path to 10 million bpd runs through a quota negotiation OPEC has not yet granted, a pipeline that will not be ready this decade, and a Hormuz chokepoint still below pre-war capacity. Chinese refiners have already started adjusting their Basrah exposure. OPEC's next quota review will show whether Baghdad can grow within the cartel or finds itself facing the same exit calculus that reshaped Abu Dhabi's supply strategy.8,3