The unexpected directive could spur progress toward ending the wasteful and environmentally damaging practice of flaring, but it also raises concerns for oil companies.

June output averaged 4.05 million bpd. Iraq will have further leeway to increase production under a breakthrough deal recently agreed by the OPEC-plus group.

Despite legislative delays to full implementation, Iraq's government has approved the next steps to a new national oil company.

Nationwide exports declined slightly to 3.318 million bpd as Iraq faces OPEC-plus expectations to limit output to compensate for past overproduction.

A new enforcement action seeks to stop 20 companies from bringing personnel or equipment into Iraq, threatening major disruptions at key projects.

Iraq's Oil Ministry is sitting on roughly 1 million bpd of capacity — and developing more — as OPEC quotas begin to ease.