Dubai/London: The storm brewing on the Organisation of Petroleum Exporting Countries' (Opec) horizon over future Iraqi oil output could engulf the producer group sooner than it would like.

"There's only one issue, but it's a big one. It's a tsunami. Iraq," said Leo Drollas at the Centre for Global Energy Studies.

After years of sanctions and war, Iraq is exempt from the output targets Opec uses to set supply levels.

But as Baghdad embarks on an unprecedented oil industry development, Opec will at some point need to bring Iraq back into the fold to prevent millions of barrels of new oil supply undoing its work to balance markets.

Opec officials and anal-ysts have said the issue is not urgent, as it could be years before Iraq makes significant increases to current output of around 2.5 million barrels per day (bpd). Baghdad's failure to reach past ambitious targets has fed the scepticism.

Five years

The consensus among analysts is that it would take around five years for Iraq to boost output by between 1 million bpd and 1.5 million bpd.

But output gains could surprise Opec in their speed.

"You could be looking at 1.5 million barrels in two years," said a senior executive at one of the oil firms involved in Iraq. "That could make a huge difference to the supply and demand balance. Is there going to be that kind of demand pick-up in that timeframe?"

Iraq's deals call for foreign firms to boost output potential to 12 million bpd in seven years, which would leave it snapping at the heels of Saudi Arabia's capacity of 12.5 million bpd.

Iraq faces huge political, security and logistical challenges in reaching that target. The first test will be how the new government that emerges from Sunday's elections will handle contracts signed by oil firms.

But assuming the deals survive intact and work can go ahead, Iraq's huge oilfields present little technical challenge to oil majors that have had to push into regions such as deepwater and the Arctic to access oil reserves. There is nowhere else on earth where international oil firms have access to such cheap-to-produce, abundant reserves.

Reaching 12 million bpd in seven years appears improbable, but oil firms believe early gains will be easy.