Iraq’s oil paralysis: A self-inflicted wound and a gift to Tehran

(Yerevan Saeed – Middle East Institute) With the Strait of Hormuz closed and oil production from Iraq’s south in free fall, Baghdad’s failure to maximize the Iraq-Turkey Pipeline (ITP) is no longer a policy dispute. It is a national emergency. Tanker traffic through the Strait of Hormuz has all but stopped. Since the United States and Israel struck Iran on February 28, and Tehran retaliated by attacking vessels in the waterway, the channel that normally carries roughly 20% of the world’s oil supply has become a no-go zone. Insurance premiums have tripled. Oil prices have topped $100 a barrel for the first time in four years. And Iraq, the second-largest producer in the Organization of Petroleum Exporting Countries (OPEC), is learning in real time what it means to be a single-exit oil state. Southern production from the oil fields of Rumaila, West Qurna, and Majnoon has fallen sharply, declining by roughly 70%, from around 4.3 million barrels per day (bpd) to just 1.3 million bpd, because storage is full and there are no tankers to load. Indeed, following attacks on two oil tankers in Iraqi waters on March 12, believed to be carried out by Iran, Baghdad halted oil terminal operations altogether. – Iraq’s oil paralysis: A self-inflicted wound and a gift to Tehran – Middle East Institute