Oil production in Iraq has decreased by approximately 60% due to the inability to load and export raw materials amid a large-scale war with Iran. Currently, the country produces only 1.7-1.8 million barrels of oil per day, whereas before the conflict, this figure reached 4.3 million barrels. This was reported by Bloomberg, writes UNN.
Details
Iraq became the first major producer in the Persian Gulf to be forced to make a radical cut in production, and subsequently, similar measures were taken by the United Arab Emirates and Kuwait.
Shortage of ships and overflowing storage facilities
The main reason for the energy collapse was the de facto closure of the Strait of Hormuz, which led to a critical shortage of tankers for exporting raw materials from the region.
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Due to the impossibility of safe passage for ships, producing countries are forced to pump extracted oil into onshore storage facilities. However, free storage capacities are quickly running out, forcing companies to mothball wells.
Consequences for the global market
According to sources familiar with the situation, the reduction in production in a key oil-producing region of the world exacerbates the global fuel deficit. As the number of available tankers for export from the Persian Gulf constantly decreases, the logistical crisis becomes the main factor influencing world prices. A further decline in production in Iraq and neighboring countries threatens the stability of energy supplies to the world's largest economies, which depended on Middle Eastern raw materials.
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