Country Brief: Iraq
Energy Profile
| Metric | Value |
|---|---|
| Crude oil production | ~4.5M bbl/day (federal fields) + ~285K bbl/day (KRG) |
| OPEC+ quota (Q1 2026) | 4.273M bbl/day |
| Exports (2025 avg) | ~3.45M bbl/day total |
| Southern exports (Basra) | ~3.05M bbl/day (88% of total exports) |
| Northern exports (Ceyhan) | ~190K bbl/day (resumed Sep 2025) |
| Proven reserves | ~145B barrels (5th largest globally) |
| Oil revenue share of GDP | ~90% of government revenue |
| Hormuz dependency | ~88% of exports (southern terminals behind Hormuz) |
Key Infrastructure
- Basra Oil Terminal (ABOT): Up to 3M bbl/day capacity (upgraded early 2025); 4 supertanker berths; handles ~85% of southern exports, fully exposed behind Hormuz
- Khor al-Amaya Oil Terminal (KAAOT): ~240K bbl/day current capacity (2 berths, partially rehabilitated; expansion to 600K+ planned); secondary Gulf terminal
- Sealine 3 pipeline: 70 km pipeline (61 km offshore) under construction; 2.4M bbl/day design capacity; completion targeted late 2027; construction status uncertain due to conflict; offshore work likely paused given Gulf shipping halt and security risk to construction vessels
- Iraq-Turkey Pipeline (ITP): Kirkuk → Ceyhan (Turkey); ~190K bbl/day (resumed Sep 2025 after 2.5-year halt)
- Al Faw Grand Port: Under construction; future oil/commercial terminal near Basra
- Southern refineries: Basra (210K bbl/day), Nasiriyah, Dhi Qar
Key Actors
- South Oil Company (SOC): operates southern fields and Basra terminals
- State Organization for Marketing of Oil (SOMO): crude oil marketing and export
- Kurdish Regional Government (KRG): controls northern fields (~285K bbl/day)
- Popular Mobilization Forces (PMF/Hashd al-Shaabi): Iran-aligned militia umbrella; 100K+ fighters
- Kataib Hezbollah: most powerful Iran-aligned PMF faction; designated terrorist organization by US
- PM Mohammed Shia al-Sudani: balancing federal control, KRG relations, and militia pressure
Crisis Exposure (Day 40 — Ceasefire Day 1)
- Production down ~70%+ (most southern Basra fields offline). Near-total shutdown of southern production capacity. Rumaila fully shut (was 1.3-1.5M bbl/day) — storage tanks full, no tanker access. West Qurna 2 cut 460K bbl/day, Maysan cut 325K bbl/day.
- Zero oil/commercial vessel entries into Iraqi ports for 40 days (Windward maritime intelligence)
- Only bypass: Kirkuk-Ceyhan pipeline ~190K bbl/day — Iraq’s sole non-Hormuz export route. Turkey terminating pipeline agreement effective July 2026.
- Shut-in fields take weeks to months to restart — Iraqi supply does not snap back even if Hormuz reopens. 40-day shutdown compounds restart difficulty vs. 10-day assessment.
- Oil revenue collapse: 40 days of near-zero exports on a 90% oil-dependent budget. Fiscal crisis is acute, not theoretical.
- Iraq airspace REOPENED (Apr 8): First flights in 40 days (closed since Feb 28). Ceasefire enables commercial aviation restoration.
- Islamic Resistance in Iraq suspended attacks on US interests for 2 weeks, concurrent with ceasefire.
- OPEC+ quota of 4.273M bbl/day meaningless if exports cannot reach market. OPEC+ symbolic 206K bpd increase for May equally irrelevant for Iraq.
- Kuwait facing parallel production shutdowns; KPC declared “significant material losses” from Iranian drone attacks.
Militia Dynamics
- PMF strikes: Mosul and Tuz Khurmatu (Mar 29): Airstrikes hit PMF sites; 3 PMF fighters killed.
- Habbaniyah base attacked (Apr 2): Aerial attack on military base in western Anbar province. 7 killed, 13 wounded. Military healthcare clinic hit.
- 100+ killed (PMF) total during the 40-day conflict.
- Islamic Resistance in Iraq suspended attacks for 2 weeks (Apr 8), concurrent with ceasefire. Key test: whether suspension holds among all faction elements.
- Six Gulf nations joint condemnation (Mar 26): Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Jordan condemned Iranian attacks and those by “armed factions loyal to Iran” from Iraq. Cited UNSC Resolution 2817. Asserted Article 51 self-defense rights. Called on Iraq to halt proxy militia attacks.
- PM Sudani attempting to restrain pro-Iran militias and avoid being drawn into wider conflict
- PMF factions retain direct IRGC communication channels; IRGC command decimated (4 senior leaders killed) may reduce coordination discipline
- Risk of militia action against US assets in Iraq or interference with northern pipeline operations persists during ceasefire
- KRG-federal tensions add complexity. Turkey terminating the 52-year pipeline agreement effective July 2026
KRG-Federal Tensions
- Northern pipeline resumed Sep 2025 after 2.5-year halt under new federal-KRG agreement
- KRG delivers ~230K bbl/day to SOMO for export via Turkey; retains 50K bbl/day for local consumption
- International oil companies receive $14/bbl after transport deductions
- Turkey announced termination of Iraq-Turkey Crude Oil Pipeline Agreement effective July 27, 2026
- If Turkey deal collapses, Iraq loses its only Hormuz bypass, a catastrophic outcome during the current crisis
Structural Vulnerabilities
- Near-total dependence on southern Gulf terminals for export revenue — 40 days of zero vessel entries has depleted fiscal reserves
- No domestic pipeline bypass to Mediterranean or Red Sea
- Northern route (Ceyhan) limited to ~190K bbl/day and politically fragile (KRG + Turkey disputes). Turkey terminates pipeline agreement July 2026 — if deal collapses during ceasefire, Iraq loses its only Hormuz bypass
- Government budget 90% oil-dependent; 40 days of near-zero exports creates acute fiscal crisis requiring emergency borrowing or reserves drawdown
- Restart lag: 40-day field shutdowns compound restart difficulty. Southern fields need weeks to months to bring back online even after Hormuz reopens. Storage tanks full; no tanker access to offload.
- Iran-aligned militias: 100+ PMF killed during conflict. Islamic Resistance suspended attacks for 2 weeks, but IRGC command decimation (4 senior leaders killed) may reduce coordination discipline. Habbaniyah base attack (7 killed) demonstrated vulnerability.
- Infrastructure concentrated and exposed: ABOT/KAAOT remain non-operational; mines in Hormuz prevent vessel access regardless of ceasefire
- Medium-term capacity expansion (6M bbl/day target by 2028–2029) now at severe risk due to conflict and extended shutdown damage
TankerBrief Coverage Angle
Commodity traders, OPEC watchers, Gulf shipping operators, defense/intelligence analysts. They need: Basra terminal restart timeline (40-day shutdown recovery), northern pipeline flow tracking (Ceyhan loadings; Turkey deal expiry July 2026), PMF/Islamic Resistance ceasefire compliance monitoring, airspace reopening impact on commercial/logistics operations, fiscal crisis trajectory (emergency borrowing, IMF/World Bank engagement), field restart sequencing and timeline, KRG-federal deal status, OPEC+ compliance vs actual production, and Sealine 3 construction updates.