Iraq starts shutting major oil fields as Hormuz crisis halts exports

Iraq started shutting oil production at its biggest fields as storage tanks fill up, and is poised to shutter about 3 million barrels a day of output if the Hormuz crisis persists, according to people familiar with the operations. 

OPEC’s second-biggest producer has begun closing both its BP Plc-operated Rumaila field, the nation’s biggest, and the West Qurna 2 project, the people said, asking not to be identified as the information isn’t public. The shutdowns may extend to about two-thirds of Iraq’s total output in the coming days if the Strait of Hormuz remains effectively out of bounds for ships, the person said.

 

 

The oil-market’s worst fears have been realised this week after Hormuz all-but closed to shipping because of the Iran war. The waterway is critical for tankers collecting crude from Middle East producers for onward transport to global markets. Ultimately, a country has no choice except to cut output if there aren’t enough ships entering the Gulf and its on-land storage tanks fill up.

 

BP manages the Rumaila field, one of the world’s biggest, jointly with Iraq and PetroChina Co. The project pumped more than 1.4 million barrels a day in 2024, and was at roughly 1.2 million a day early last year, according to the company’s data. Output at West Qurna 2 was just short of 500,000 barrels a day. 

 

Iraq has also halted oil exports from its semi-autonomous Kurdistan region to the port of Ceyhan in Turkey, people with direct knowledge of the situation said earlier.

 

Iran’s retaliatory strikes across the Middle East has also hit energy infrastructure across the region. Saudi Arabia earlier closed its biggest oil refinery and Qatar stopped production from the world’s largest liquefied natural gas export plant following drone attacks.