Sources familiar with the situation say Iraq’s oil output has fallen by roughly 60 percent as conflict in Iran disrupts tanker availability and effectively blocks exports through the Strait of Hormuz.
Current production is estimated at about 1.7 million to 1.8 million barrels per day, down sharply from roughly 4.3 million barrels per day before the disruption began. The decline underscores a mounting logistical problem in the Persian Gulf, where the war has sharply reduced the number of vessels able to load crude.
With fewer tankers available to take on cargoes, regional producers have been compelled to cut production because onshore and floating storage is filling. The shortage of lift capacity has thus translated into lower wellhead output as storage options are exhausted.
Iraq was the first major Gulf producer to scale back oil production in response to the disruption; the United Arab Emirates and Kuwait have since implemented their own output cuts as the impact spread across the region. The conflict has in effect halted traffic through the Strait of Hormuz - a chokepoint that handles roughly a fifth of global oil exports - turning a regional logistical squeeze into a broader energy-supply risk.
Producers in the Gulf, confronted with constrained export routes and limited tanker access, have been pumping crude into storage, but available capacity is reported to be rapidly diminishing. That dynamic has left national oil companies and traders grappling with where to place volumes that can no longer move to refiners and markets on schedule.
The situation highlights how disruptions to maritime transport capacity and chokepoint access can translate quickly into material production declines. Observers say the combination of blocked shipping lanes and dwindling storage capacity has forced an abrupt and large-scale reduction in flows from one of the world’s key producing regions.