Reuters: Iraqi Oil Exports Fall by Up To 3 Million Barrels Per Day Amid Hormuz Disruptions
The closure of the Strait of Hormuz and ongoing instability in the Gulf have cut Iraq's oil exports by as much as 3 million barrels per day
ERBIL (Kurdistan24) - Iraq's oil exports have fallen by between 2.5 million and 3 million barrels per day due to the ongoing Gulf crisis and the closure of the Strait of Hormuz, according to trading sources cited by Reuters.
The report – that was published on Friday – said Iraq, alongside Kuwait and the United Arab Emirates, has resorted to alternative export methods to move part of its crude supplies and prevent a complete halt in shipments. Despite those efforts, export volumes remain significantly below normal levels.
The disruption comes amid continued uncertainty in global energy markets since the outbreak of the Iran war and Tehran's announcement that the Strait of Hormuz was closed.
Initial estimates suggested the crisis could remove between 12 million and 15 million barrels per day of non-Iranian Gulf crude exports from global markets, raising fears of one of the largest oil supply disruptions in history.
Those concerns pushed Brent crude prices to nearly $120 per barrel in early March, while some analysts warned prices could eventually reach $200 per barrel.
However, new shipping and trading data indicate that oil flows through the region have proven more resilient than initially expected.
According to ship-tracking firm Kpler, approximately 136 million barrels of non-Iranian crude moved through export channels in the Strait of Hormuz and the Gulf of Oman between the beginning of April and June 10, averaging around 1.9 million barrels per day.
Kpler said oil flows strengthened after the initial shock of the conflict as producers expanded alternative logistics networks.
Trading sources told Reuters that Iraq, Kuwait and the UAE have been exporting substantial volumes of crude using tankers that have switched off their satellite tracking systems. Some of those shipments were reportedly coordinated with Iran, while others were not.
These exports have supplemented Saudi Arabia's oil shipments from its Red Sea port of Yanbu, which have averaged between 4 million and 5 million barrels per day since March.
The International Energy Agency (IEA) recently estimated Gulf oil supply losses at around 14 million barrels per day, equivalent to approximately 14 percent of global oil production.
However, sources at two major trading companies told Reuters that internal assessments suggest the actual supply shortfall is closer to 5 million to 6 million barrels per day, as regional producers have found ways to keep exports moving.
According to one source's calculations, Iraqi exports remain 2.5 million to 3 million barrels per day below normal levels, Kuwait's exports are down by roughly 1.5 million barrels per day, while Saudi Arabia and the UAE have each lost about 500,000 barrels per day.
Other factors have also helped stabilize global markets, including rising US oil exports, the release of a record 400 million barrels from international emergency stockpiles, and weaker-than-expected Chinese demand.
One trading source estimated that when reduced Chinese demand is factored in, the current global market shortfall may be closer to 2 million barrels per day.
Bjarne Schieldrop of SEB said the decline in oil prices from their March and April highs reflects the market's ability to adapt to the disruption.
"It is an indication that commercial oil markets are sufficiently supplied for now given all the ways the world has adapted to the shock," he said.
Despite the market's ability to adjust, analysts warn that the current workaround measures may not be sustainable indefinitely.
Global oil inventories are continuing to decline, increasing the risk of renewed price spikes if disruptions persist.
The US Energy Information Administration said this week that stockpiles across the world's largest economies are heading toward their lowest levels since at least 2003 due to lost Gulf production.
Meanwhile, S&P Global Energy reported that inventories at two major US storage hubs have fallen to 351 million barrels. The company identified 325 million barrels as a potential "danger zone" where markets become increasingly vulnerable to logistical disruptions and sudden price increases.
"As inventories drop below this threshold, the market becomes increasingly vulnerable to logistical bottlenecks and price spikes," the report said.