Iraq raises production of three oil fields as exports recover economy

Iraq has raised the production of three of its largest oil fields in the south of the country to full capacity, with the beginning of a recovery in export operations and the arrival of oil tankers to load shipments, in a step that reflects the acceleration of the recovery of crude exports after the turmoil that the Gulf witnessed during the Iranian war.

Bloomberg quoted an informed source as saying that the state Basra Oil Company directed the operators of the West Qurna 1, North Rumaila and Artawi fields to raise production to maximum capacity, after tanker traffic improved and Iraqi oil shipments began to depart through the Gulf.

The decision comes after weeks of fluctuating production levels, as Baghdad had reduced the production of some fields as storage facilities became full and tanker loading was disrupted due to navigation disturbances in the Strait of Hormuz, before returning and requesting an increase in production after reaching a temporary US-Iranian agreement.

Despite the improvement in exports, Iraq is still behind some Gulf producers in restoring pre-war export levels, as the UAE has restored its exports to pre-crisis levels, while Saudi Arabia is close to achieving this.

Shipping data collected by Bloomberg showed that Iraqi oil tankers have resumed leaving the Gulf, and Total Energies has offered millions of barrels of Iraqi crude for immediate delivery to Asian markets, which contributed to accelerating the pace of exports.

The production of the southern fields had declined to about 1.1 million barrels per day at the end of June, that is, less than half of the production capacity of the Basra Oil Company, after reaching about 1.5 million barrels per day in the middle of the month.

Expansion plans

Last June, Iraqi Prime Minister Ali al-Zaidi confirmed that the government aims to raise oil production to 7 million barrels per day during the next three years, noting that Baghdad informed American companies of this plan, while giving priority to American energy companies in new projects.

He explained that Iraq is also working to restore full oil export capabilities, after being affected by regional tensions, as part of a broader trend to move from a security partnership with the United States to an economic and investment partnership.

Al-Zaidi revealed a plan to establish an energy and development fund whose resources could reach $400 billion over three decades, financed by revenues equivalent in its first phase to the production of 500,000 barrels per day, with the possibility of gradually increasing it to two million barrels per day, to finance energy, electricity and infrastructure projects in cooperation with American companies.

Iraq is the second largest oil producer in OPEC after Saudi Arabia, and its current production amounts to about 4 million barrels per day, while oil revenues represent more than 90% of general budget revenues, which makes increasing production and attracting investments among the government’s most prominent priorities to support economic growth and finance development projects.