Iraq reduces production at key oil field after Strait of Hormuz disruption

2026-03-03 - 16:27

Iraq reduced production at a major oil field on Tuesday after the Strait of Hormuz was effectively closed, according to an official document and oil ministry sources. The document, which was confirmed by two ministry sources, indicated that the operation manager at Iraq’s Rumaila oil field ordered a reduction of “production and pumping... by 100 percent from” the south part of the field starting early Tuesday afternoon. The document stated that the closure of the Strait of Hormuz caused a “shortage of tankers” in Iraq’s southern ports, which led to stockpiling “reaching critical levels”. The ministry sources told AFP that Iraq will use its oil production for its own refineries. BP works in partnership with the state-owned Basra Oil Company in Rumaila. The oil field there produces almost a third of Iraq’s output. Nearly a quarter of the world’s seaborne oil supplies pass through the Strait of Hormuz. Iran’s Revolutionary Guards declared it closed on Saturday, prompting several international shipping groups to halt passage through the waterway. Iraq is a founding member of the OPEC cartel, and crude oil sales make up 90 percent of the country’s budget revenues. It currently exports 3.5 million barrels per day. Oil production has also been disrupted in Iraq’s northern Kurdistan region due to the ongoing Middle East war. A source at an oil company in Kurdistan told AFP that most foreign oil companies have “temporarily” halted production as a precautionary measure. The Kurdistan region hosts US-led coalition troops, and its capital Erbil is home to a major US consulate complex. Since the Israel-US attack on Iran, Kurdistan has been the target of drone attacks, the majority of which were intercepted by air defences. Oil fields in Kurdistan have been hit several times in recent years in attacks blamed on Iran-backed groups. AFP