Comments by Iraqi Deputy PM for Energy Hussain al-Shahristani have fueled new speculation about an imminent challenge to Saudi Arabia’s stranglehold on OPEC and by extension the global oil market.
Shahristani revealed that Iraq is planning to triple its capacity for crude oil production by the end of the decade, and is working with its neighbor Iran to boost export capacity as much as possible, as quickly as possible.
The goal is for the two nations to have so much excess capacity that they can compete with Saudi Arabia as a source for “flex production,” key to controlling the global price.
On the one hand, OPEC is likely to challenge this with efforts to impose strict quotas on Iraqi oil production, something they haven’t attempted to do with the nation in over a decade.
Yet while historically there has been Western support for keeping Iraqi oil off the market, Iraq is welcoming foreign oil companies into their fields, in stark contrast to Saudi Arabia’s own nationalized oil industry, and that could give them some flexibility, or at least fewer threats, than they’ve seen in years past.