Iraq has begun shutting down production at its largest oil field as crude oil storage tanks approach saturation. If the blockade of the Strait of Hormuz continues, the country's daily production loss could reach up to 3 million barrels, equivalent to two-thirds of its total capacity.
According to CCTV News, on the 3rd local time, the Iraqi Ministry of Oil issued a statement saying that due to the closure of the Strait of Hormuz leading to disruptions in international shipping, tankers entering the Persian Gulf are obstructed, and there is a shortage of tankers at Iraq's southern ports. The southern giant oil field Rumaila's southern area has announced a suspension of production. Additionally, affected by the regional situation, the Kurdistan Region of Iraq announced on the 3rd the suspension of oil exports from the Kurdistan Region to Turkey's Ceyhan port.
The impact of this crisis is not limited to Iraq. Iran's retaliatory strikes in the Middle East have affected multiple energy infrastructures, Saudi Arabia has shut down its largest refinery, and Qatar has suspended production at the world's largest liquefied natural gas export facility following a drone attack. The substantial blockade of the Strait of Hormuz is pushing the energy market towards overall tension.
<h2>Tanks Full, Forced to Cut Production</h2>
The Rumaila oil field is jointly operated by BP, the Iraqi government, and China National Petroleum Corporation, and is one of the largest oil fields in the world. BP data shows that the oil field's daily production in 2024 exceeds 1.4 million barrels, up from about 1.2 million barrels at the beginning of last year. The daily production of the West Qurna-2 oil field is close to 500,000 barrels.
When the Strait of Hormuz is effectively impassable and the number of vessels entering the Persian Gulf sharply decreases, the onshore storage tanks of oil-producing countries will quickly fill up, making production cuts the only option. The Strait of Hormuz is a key route for Middle Eastern oil-producing countries to transport crude oil to global markets, and the current conflict with Iran has nearly closed this waterway.
<h2>Kurdistan Exports Also Interrupted</h2>
Iraq's export difficulties are not limited to the southern oil fields. According to Bloomberg citing informed sources, the semi-autonomous Kurdistan region of Iraq has suspended crude oil exports to Turkey's Ceyhan port, and this northern export route has also been interrupted.
The pipeline route from Kurdistan to Turkey was previously seen as an alternative option to bypass the Strait of Hormuz. Now that this route is also interrupted, it means that nearly all of Iraq's major export channels are blocked, and the country's crude oil exports are almost at a complete standstill

According to CCTV News, on the 3rd local time, the Iraqi Ministry of Oil issued a statement stating that due to the closure of the Strait of Hormuz, international shipping has been interrupted, and oil tankers are hindered from entering the Persian Gulf waters. There is a shortage of oil tankers at the southern ports of Iraq, and production has been suspended in the southern oil area of the giant Rumaila oil field. In addition, affected by the regional situation, the Kurdistan Region of Iraq announced on the 3rd the suspension of oil exports from the Kurdistan Region to the Turkish port of Ceyhan. If the blockade continues, daily production losses could reach up to 3 million barrels, equivalent to two-thirds of total capacity

- Iraq has begun shutting down production at its largest oil field due to rising crude oil tank storage levels and potential losses of up to 3 million barrels per day if the closure of the Strait of Hormuz persists.  
- The Iraqi Oil Ministry announced on March 3 that international shipping disruptions have led to a shortage of oil tankers in southern ports, further impacting production.  
- The crisis is not limited to Iraq, as energy infrastructure in Iran, Saudi Arabia, and Qatar has also faced significant disruptions due to regional tensions.

Wallstreetcn

Pro Ultrshrt Crude Oil

SPDR O&G Ex & Prd

VanEck Oil Services ETF

Disruptions in the Strait of Hormuz and saturated storage tanks may lead to a daily production cut of up to 3 million barrels in Iraq