By Yongchang Chin, Serene Cheong and Anthony Di Paola (Bloomberg) —

Iraq will raise shipments of a key crude grade next month, part of an enlarged export program indicating that the OPEC+ nation is boosting its oil production.

The Middle East country will lift shipments of destination-free Basrah Medium oil to 17 million to 18 million barrels next month, people with knowledge of the matter said. The number is significantly up from July and will lead to a slight increase in total exports, one of them said.

The Organization of the Petroleum Exporting Countries and their allies are in the throes of a production boost that so far has promised more oil than it has delivered, helping oil prices to hold up during the Northern Hemisphere summer. This, though, is the latest sign that the pledged barrels are starting to hit the market.

The volume of destination-free crude would be about 4 million barrels, or 20%-30%, more than typical monthly quantities, the people said, asking not to be identified as they’re not authorized to speak publicly.

OPEC — in which Iraq is the second-biggest producer — and its allies have rolled out a series of output hikes in recent months. That move, a reversal of years of supply constraint, comes despite signs of a looming global supply glut. Though there isn’t a direct correlation, physical exports are among the best indicators of any ramp-up by OPEC+.

Destination-free shipments are typically allocated to upstream partners and equity investors, and are highly sought after. Equity producers include Shell Plc, TotalEnergies SE, and China National Petroleum Corp. A number of Middle Eastern crudes are sold on a destination-restricted basis, meaning that they can only be shipped to a specific refinery or end-user, and can’t be freely traded.

Production Quotas

Overall export plans for August haven’t been made available yet by SOMO, the state marketer. The full program consists of both destination-free and destination-restricted supplies of Basrah Medium and Basrah Heavy crudes, and small volumes of the Qayara grade. SOMO didn’t immediately respond to an email seeking comment sent outside regular business hours on Friday.

Iraq is among OPEC+ countries that have in the past exceeded their production quotas. Even with a higher limit allowed, any added output would make it even more difficult for Iraq to meet its target.

Saudi Arabia, which as the de facto leader of OPEC and the wider OPEC+ group has urged other members to keep their output in check, has itself been shipping oil at elevated rates in recent weeks following heightened regional tensions.

Iraq’s crude shipments rose to about 3.35 million barrels a day in June, according to ship-tracking data compiled by Bloomberg, with Basrah Medium making up more than 60%. Flows from Iraq have not been affected by a recent spate of drone attacks on the semi-autonomous region of Kurdistan, since SOMO currently doesn’t export any crude from that region.

© 2025 Bloomberg L.P.