price of crude oil
The impact of the war in the Middle East and the geopolitical tension that arose thereafter was clearly visible on the world oil market. Iraq, which is one of the world’s major oil producing countries, was among the countries most affected by this crisis. During the war, Iran’s closure of the Strait of Hormuz disrupted oil supplies and Iraq had to reduce production at many of its oil fields.
However, now there are signs of improvement in the situation. Iraqi officials say the country could return to pre-war oil production levels in the next one to two months.
Process to increase production begins
Iraq’s Oil Ministry spokesman Salim Farhood told government news agency INA that production is now being increased again in oil fields where production capacity was reduced. He said that the oil industry is gradually moving towards normalcy and production may soon reach previous levels. According to officials, technical and operational activities have been intensified in the oil fields so that production capacity can be restored soon.
Relief from America-Iran agreement
The agreement reached this week to end the conflict between America and Iran has given some relief to the oil market. Although further negotiations between the two countries have not yet been completely successful, yet after the initial agreement, traffic in the Strait of Hormuz is gradually becoming normal. Iraq’s Oil Minister Bassem Khodair said that as oil transportation through this important sea route becomes smooth, the country’s exports will also increase.
There was a huge decline in exports
Before the war started, Iraq used to export about 3.5 million barrels of oil per day. Most of it was sent through the Strait of Hormuz. But there was a huge decline in exports during the crisis. According to government figures, only 10 million barrels of oil could be exported through this route in April, whereas before the war this figure was an average of 93 million barrels.
Iraq’s economy depends on oil
Iraq’s economy is mainly based on oil exports. About 90 percent of the country’s total income comes from the export of crude oil. In such a situation, normalization of production and exports is considered very important for the government’s revenue, economic development and financial stability. Experts believe that if the regional situation remains stable, Iraq’s oil sector can recover rapidly in the coming months.
