There is a certain irony in a cartel built on discipline unravelling because its members want to sell more of the very product it exists to control. Yet that is precisely where OPEC finds itself in 2026: the uae has already walked out, and now iraq — one of the five nations that founded OPEC in Baghdad in 1960 — is planning to follow, according to Bloomberg reports cited by india Today.

Neither Iraq's government nor the OPEC secretariat has issued an official public response to the Bloomberg report at the time of publication. Saudi Arabia's energy ministry has also not commented publicly on the development. india Today's reporting relies on the Bloomberg account, and the following analysis proceeds on that basis.

The immediate trigger is quotas. iraq wants to pump more crude than Riyadh's production framework permits. Baghdad's argument is blunt: it has a war-battered economy, massive reconstruction bills, and is sitting on reserves it cannot monetise because saudi arabia would rather keep barrels off the market to defend a $80-plus price floor. That tension — between a price defender and a volume maximiser — is the oldest fault line in OPEC's geology. What is new is that the fault is now cracking open.

The uae Precedent — and Why It Emboldens Baghdad

The UAE's exit from OPEC set a template that iraq is now studying closely. Abu Dhabi invested billions in expanding its production capacity to over 5 million barrels per day, only to be told by OPEC's Saudi-led core that it must keep output well below that ceiling. The logic of departure became inescapable: why invest in capacity you cannot use?

Iraq's calculus is similar in shape if different in scale — its reserves are the fifth-largest on Earth, according to OPEC's own Annual Statistical Bulletin, yet its actual output has been chronically throttled by cartel discipline that critics and several oil analysts argue functions primarily as a mechanism to support Saudi fiscal interests, rather than serving the collective equally. Iraq's leadership appears to increasingly share that view.

As one widely-shared social media analysis put it: "OPEC is falling apart." That may be hyperbolic, but it captures a structural truth — the cartel's cohesion depended on members accepting short-term pain for long-term price stability, and the willingness to accept that pain is evaporating.

What This Means for india — the Buyer in the Room Nobody Is Discussing

For india, which imports over 85% of its crude oil needs according to the Petroleum Planning and Analysis Cell (PPAC), the fracturing of OPEC is not a spectator sport — it is an active opportunity. Here is the arithmetic that matters for New Delhi:

First, more oil on the market means softer prices. If iraq exits OPEC and ramps production unconstrained by quotas, global supply increases. Iraq's production capacity exceeds 4.5 million barrels per day, according to the international Energy Agency's (IEA) most recent oil Market Report. Combined with the UAE's freed-up barrels, this puts meaningful downward pressure on Brent crude — the benchmark that directly determines what indian refiners pay. india imports roughly 5.5 million barrels per day, according to PPAC data, spending over $120 billion annually on crude, as noted in the IEA's World Energy Outlook. Based on those import volumes, every $1 drop in crude prices saves india approximately $2.1 billion annually on its import bill, according to estimates derived from PPAC and reserve bank of india external-sector data.

Second, bilateral deals become possible. Inside OPEC, members sell under the cartel's pricing framework. Outside it, iraq and the uae can negotiate directly with large buyers like india, China, and South Korea. India's oil diplomacy — already adept at securing discounted Russian crude after 2022 — would gain new leverage. The possibility of long-term supply contracts at below-OPEC prices is suddenly on the table.

Third, Saudi Arabia's leverage weakens. Riyadh has long been India's top or second-largest oil supplier. If the cartel shrinks to what analysts describe as a Saudi-plus-a-few-loyalists rump, the Kingdom's ability to dictate terms to its largest Asian customers erodes. India's diversification strategy — which has already shifted towards russia, the US, Brazil, guyana and West Africa — gets a structural tailwind.

The gulf Geopolitics Underneath

This is not simply an economic story. The gulf Cooperation Council (GCC), which includes saudi arabia, the uae, Kuwait, qatar, Bahrain, and oman — the six core gulf Arab states — has long papered over deep strategic disagreements with the veneer of oil solidarity. iraq, though a gulf country, is not a GCC member, and its ties with iran add a geopolitical complexity that saudi arabia views with suspicion.

Iraq's plan to leave OPEC is, in part, a signal to Riyadh that Baghdad will not subordinate its fiscal survival to Saudi Arabia's market-management ambitions. The UAE's departure delivered a similar message from inside the GCC itself: even allies have limits when national interest diverges from cartel discipline.

Can OPEC Survive a Double Exit?

OPEC has survived defections before — ecuador and qatar both left and the cartel endured. But losing the uae (a top-ten global producer) and potentially iraq is qualitatively different. Together, they represent roughly a quarter of OPEC's pre-exit production output, according to data compiled from the OPEC secretariat's monthly oil market reports. A cartel that controls barely half the market's swing supply is, in the view of several energy economists, no longer a cartel in the traditional sense — it becomes a Saudi production-management vehicle with diminishing returns.

The OPEC+ framework, which brought russia and other non-OPEC producers into a broader alliance, is under parallel strain. Russia's own production decisions since 2022 have been driven by sanctions and war economics, not cartel solidarity. The architecture that kept oil prices elevated for the better part of a decade is visibly buckling.

India's Strategic Play

For indian policymakers and consumers, the question is not whether OPEC fractures — it already is fracturing — but how aggressively New delhi can exploit the new landscape. India's petroleum minister and the Ministry of External Affairs have consistently advocated for "fair and reasonable" oil prices. A weakened OPEC offers the structural conditions for exactly that.

The risk, of course, is that saudi arabia responds to defections by flooding the market itself — a repeat of the 2014-2016 price war — to punish departing members. That scenario would crush oil prices short-term, delivering a windfall for indian consumers and narrowing the current account deficit, but it would also create volatility that complicates long-term energy planning.

The smarter bet for india is to lock in bilateral supply agreements with iraq and the uae now, while both are hungry for guaranteed buyers outside the OPEC umbrella. Every barrel secured through a direct deal at a negotiated discount is a barrel india does not have to buy at OPEC's administered price.

The cartel born in Baghdad in 1960 may not die in 2026. But it is being hollowed out from within — and for a country that spends over $120 billion a year on crude imports, according to IEA and PPAC estimates, that hollowing out is less a crisis than a once-in-a-generation buying opportunity.

Key Takeaways

• Iraq, OPEC's second-largest producer and a founding member, is planning to leave the cartel over quota disputes, following the UAE's recent exit, according to Bloomberg reports cited by india Today.
• India imports over 85% of its crude needs according to PPAC; every $1 drop in oil prices saves the country an estimated $2.1 billion annually on its import bill, per PPAC and RBI data.
• A weakened OPEC opens the door for india to negotiate bilateral oil supply deals with iraq and the uae outside the cartel's pricing framework.
• Together, the uae and iraq represent roughly a quarter of OPEC's pre-exit output according to OPEC secretariat data — their departure would fundamentally diminish Saudi Arabia's pricing power.
• India's diversification strategy, already tilted toward Russian, US, and Brazilian crude, gets a structural tailwind from OPEC's fragmentation.

Frequently Asked Questions

Why is iraq planning to leave OPEC?

iraq wants to increase its oil production beyond its OPEC-assigned quota to boost revenue for its post-war economy. Saudi Arabia's insistence on production discipline to maintain high prices conflicts with Iraq's fiscal needs, according to Bloomberg reports cited by india Today. Neither Iraq's government nor the OPEC secretariat has publicly confirmed or denied the report.

How does OPEC's fracture affect India's oil prices?

india imports over 85% of its crude oil, according to PPAC. If iraq and the uae pump freely outside OPEC constraints, global supply increases and prices tend to fall. Every $1 drop in crude saves india approximately $2.1 billion annually on its import bill, based on PPAC and RBI data.

What are the GCC countries?

The gulf Cooperation Council comprises six member states: saudi arabia, the uae, Kuwait, qatar, Bahrain, and Oman. It is sometimes mistakenly cited as having seven members, but there are six. iraq is a gulf country but is not a GCC member.

Is iraq part of the UAE?

No. iraq and the uae are separate sovereign nations. iraq is located in the northern Persian gulf region, while the uae is a federation of seven emirates on the southeastern Arabian Peninsula.

Can OPEC survive without iraq and the UAE?

OPEC would lose roughly a quarter of its pre-exit output if both depart, according to OPEC secretariat data. While the cartel has survived smaller defections before, losing two major producers would significantly diminish its ability to control global oil prices, effectively reducing it to what analysts describe as a Saudi-centric production management vehicle.