Iraq exported 10 million barrels of oil through the strategic Strait of Hormuz in April, a dramatic decline from approximately 93 million barrels per month before the Iran war, according to Iraq's new oil minister, Basim Mohammed. He made the announcement during his first press conference on Saturday.
Impact of Strait of Hormuz Closure
The closure of the Strait of Hormuz, triggered by the ongoing Iran war, has severely restricted oil exports from major regional producers including Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq. This disruption has sent global oil prices sharply higher.
Minister Mohammed explained that the low export volumes through the Strait are due to limited availability of oil tankers, which are reluctant to enter the area because of insurance concerns. He stated, "Exports through the Strait of Hormuz are low and depend on the arrival of oil tankers, which are not entering because of insurance."
Current Production and Pipeline Exports
Iraq is currently producing 1.4 million barrels per day. The country's crude exports via the Kirkuk–Ceyhan oil pipeline resumed in March following an agreement between Baghdad and the Kurdistan Regional Government to restart flows. Mohammed noted, "We export 200,000 barrels through (Turkish) Ceyhan port, and we have a plan to increase it to 500,000 barrels."
Plans to Boost Production and Exports
Baghdad is engaged in talks with Ankara to forge a new cooperation agreement covering both upstream and downstream projects, expanding upon the previous deal that was limited to crude exports. Additionally, Iraq is negotiating with US companies, including Chevron, ExxonMobil, and Halliburton, to develop oil and gas projects. Mohammed urged these firms to sign contracts swiftly to help secure substantial revenues for Iraq.
The minister also revealed plans to engage with OPEC to enhance the country's production and export capacity. He stated, "We have a dialogue with OPEC to increase Iraq's export capacity. When exports increase and the ceiling opens up with OPEC, we will bring in significant financial revenues for Iraq." Baghdad aims to reach a production capacity of 5 million barrels per day through this dialogue.
Iraq's Commitment to OPEC
Despite challenges, Iraq has no intention of leaving OPEC or OPEC+. Two Iraqi oil officials told Reuters in April, following the United Arab Emirates' decision to exit the group, that Iraq supports a strong organization to ensure stable and acceptable oil prices.
