Iraq’s Oil Exports Rebound After U.S. Deal Amid Crisis

Iraq's crude oil exports are expected to rise after a recent agreement with the United States. The deal, made last week, will allow Iraqi oil to be transported through a corridor along the coast of Oman, according to Iraq’s Foreign Minister. This agreement comes as Iraq has faced major disruptions to its oil exports due to ongoing conflict in the region.

Key Details

U.S. imports of Iraqi crude have dropped to their lowest levels since the 2003 war. Data from the U.S. Energy Information Administration shows that imports fell from over 10 million barrels in January to just 504,000 barrels in June. In some weeks this summer, the U.S. imported no Iraqi oil at all. However, exports have started to recover. Iraq reportedly exported about 3.4 million barrels daily in October, nearly matching pre-war levels of 3.3 to 3.5 million barrels.

The crisis has hit Iraq hard. It is OPEC's second-largest oil exporter and lost around $60 billion due to war-related disruptions. Before the conflict, Iraq was exporting more than 3 million barrels per day via the Strait of Hormuz, its main outlet. Production from southern fields dropped by 70% at the peak of the crisis but has since recovered due to increased shipments through various routes, including the Turkish port of Ceyhan.

Background

Iraq's oil minister said the country is now exporting through three routes: the Strait of Hormuz, Ceyhan, and tanker trucks through Syria. The government plans to increase exports to 5 million barrels daily, supported by investments in new pipelines and export terminals on Iraq's Gulf coast.

Related coverage: India’s Middle East Oil Imports Surge to Pre-War Levels, Brent Crude Drops to $94.66 on U.S.-Iran Deal Hopes.

Based on reporting by: oilprice.com