Shafaq News – Baghdad

Iraq’s budget deficit will not shrink under the latest OPEC+ decision to raise production and may instead widen, economist Ahmed Abedrabbo warned on Monday.

OPEC+ confirmed on September 7 that it will lift output in October by 137,000 barrels per day, part of a gradual rollback of cuts that has already added about 2.5 million barrels daily — roughly 2.4% of global demand — under US pressure to ease prices.

Abedrabbo told Shafaq News that the move offers Iraq, OPEC's second-largest oil producer, little benefit while threatening further price declines. “The financial impact will be neutral to negative unless Iraq’s quota rises significantly or prices recover,” he said.

Iraq currently exports about 3.38 million barrels per day, compared with the 3.5 million assumed in the state budget, which was based on $70 oil. With Brent crude near $65, Abedrabbo estimated annual losses of $6.2B, adding that an extra 10,000 barrels per day yields only about $237M a year.

He put Iraq’s fiscal break-even at $84 per barrel and cited a deficit of more than seven trillion dinars (over $5B) in the first half of 2025. Northern exports through the Ceyhan pipeline, recently restored at 80,000 barrels per day, could add up to $1.9B annually but remain vulnerable to even minor price shifts.

The economist urged the government to revise budget assumptions below $70, rein in current spending, diversify revenues, expand northern export routes, and adopt hedging tools to shield against volatility.