Iraq OPEC's 800-pound gorilla

LONDON, Dec. 18 (UPI) -- Iraq oil gushing into the global market could create problems for other oil-producing nations as analysts predict Iraqi production capacity is underestimated.

Members of the Organization of the Petroleum Exporting Countries meet next week, though the agenda does not include December's oil auctions in Iraq, the Financial Times reports.

Iraq at its December auction scored deals on some of its largest oil fields, which could boost its production potential from 2.5 million barrels per day to as much as 12 million in the next 10 years.

OPEC ministers could face repercussions from that increase as production quotas put strains on their potential revenue.

Baghdad, for its part, said it should have the right to pump as much oil as it can in order to make up for decades of shortfalls from crippling economic sanctions and war.

Edward Morse, former U.S. deputy assistant secretary of state for international energy policy and current head of research at Louis Capital Markets in New York, said the resource potential of Iraq is much more than expected.

"The world is vastly underestimating the potential of Iraq production," he said.

If OPEC members do not cut production to compensate for Iraq, the price of oil could drop substantially, the Times said.