Iraq is sending a warning shot to OPEC: raise Baghdad's oil production quota to better reflect its capacity and fiscal needs, or risk yet another defection from the oil-producing cartel.

"The ministry currently has no intention of withdrawing from OPEC, and we remain committed to operating within the organization's framework and mechanisms," Oil Ministry spokesman Salim Al-Rikabi told Bloomberg via a text message.

Al-Rikabi warned, "Of course, taking into consideration that the Ministry is moving forward with increasing its production to align with its capabilities and needs, the organization should raise Iraq's production level. Otherwise, a decision will have to be made regarding whether to remain in or withdraw from OPEC."

Iraq's threat to leave OPEC comes two months after the UAE formally left the oil cartel, which now comprises 11 members, including Algeria, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, and Venezuela.

The UAE ranks among the top producers in OPEC (4.05 million bpd) and left the group due to its growing capacity ambitions (targeting 5 million bpd by 2027).

We noted at the time...

On a normal, pre-disruption OPEC basis, Iraq and the UAE were huge:

A possible exodus of Iraq, on top of the UAE's recent exit, would only further weaken OPEC's ability to defend price floors, especially during periods of glut.

However, a separate Bloombreg report said Iraq walked back its threat to leave... 

"The reports suggesting that Iraq is considering ending its membership in OPEC do not reflect the official position of the Iraqi Government. Neither the Prime Minister nor the Government of Iraq has proposed withdrawing from the Organization," the Oil Ministry said in a statement.