USD flows: OPEC pressure cooker
Reuters sources have Iraq making OPEC threats of quota
Iran closures have exerted critical financial and fiscal stress on the region
That creates a pressure cooker environment for (hopefully) post war supply and cooperation
Interesting headlines with Reuters’ sourcing having Iraq ‘compelled to consider all options’ if its OPEC quota is not significantly increased. It has other sources saying it had considered leaving but the current plan was to seek higher quota.
The news, on top of the UAE exit that was rather overshadowed oil-price-wise by the ongoing closure at the time, underscores just how much acute, critical financial stress the Strait closure and output halts have put on the region, accentuating cracks over output-to-capacity constraints that had been kicked into the long grass for 2027.
While Iran (and whether the deal and Strait open holds) is the critical factor of course, this reminds that there are very real dynamics driving the other side of the supply-demand story around OPEC politics and strained / cheat-tolerance-zone cooperation strategy. If exits and cheating significantly escalate then there’s always the intermittent Saudi nuclear option of the ‘price shock strategy’.