The oil cartel that has shaped global energy markets for over six decades is watching its grip slip. A growing wave of defiance against OPEC production quotas, headlined by Iraq’s potential departure from the group, has major Wall Street banks warning that crude prices could tumble below $50 a barrel.

That would represent a roughly 25% decline from recent levels, the kind of move that reshapes entire economies, kills drilling projects, and sends energy stocks into freefall.

The cracks in the cartel

Iraq’s threat to leave OPEC has been described as a “final nail in the cartel’s coffin.” The country has long chafed under production quotas it views as unfairly restrictive, and a full exit would mark the most significant departure from the organization in years.

Iraq isn’t just any member. It’s OPEC’s second-largest producer. If Baghdad walks, it doesn’t just remove one country from the agreement. It gives every other restless member a template for doing the same.

Saudi Arabia flagged this problem back in 2024, warning that oil could hit $50 if member countries kept ignoring their agreed-upon production cuts. Those warnings went largely unheeded.

What Wall Street is saying

Bank of America warned in October 2025 that Brent crude could face prices below $50 per barrel if OPEC+ supply surges continue unchecked.

Goldman Sachs has echoed that concern, noting the risk of oil prices slipping into the low $50s should projected production surpluses materialize.

J.P. Morgan’s outlook is somewhat less dire but still bearish by historical standards. The bank estimates Brent crude will average around $60 per barrel in 2026, citing soft supply-demand fundamentals.

The demand side isn’t helping

China, which has been the engine of global oil demand growth for the better part of two decades, is showing signs of deceleration. The world’s largest crude importer has been dealing with a sluggish economic recovery, a property sector that remains under pressure, and an aggressive push toward electric vehicles that is structurally reducing its appetite for petroleum products.

Meanwhile, non-OPEC supply keeps growing. US shale producers continue to pump at elevated levels. Countries like Brazil and Guyana are bringing new production online. Canada’s Trans Mountain pipeline expansion has unlocked additional export capacity.

For traders navigating this environment, the key variable to watch is whether Iraq actually follows through on its departure threats or uses them as leverage to negotiate a larger quota. The difference between those two outcomes could easily represent a $15-per-barrel swing in price.