Iraq has begun cutting oil production in key southern fields, including Rumila, while West Qurna 2 is also shutting down at around 460,000 barrels per day, according to Iraqi oil officials. The decline follows an increase in regional violence that has effectively halted tanker traffic through the Strait of Hormuz.
Iraqi officials said chaotic navigation and a shortage of available tankers had pushed storage tanks at southern export terminals to critical levels, forcing them to cut production.
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Separately, a drone strike targeted the UAE port of Fujairah, the country’s largest oil export hub outside the Strait of Hormuz. The incident raises security risks for the Gulf’s energy infrastructure, although there have been no confirmed reports of catastrophic structural damage at the port.
The Strait of Hormuz holds about one-fifth of the world’s oil. Any sustained disruption materially tightens the offshore oil market, particularly for Middle Eastern barrels bound for Asia.
Oil prices have risen sharply as geopolitical risk has put traders at a growing premium and the possibility of widespread supply disruptions in the Gulf. At 09:30 EST on Tuesday morning, Brent crude futures rose 7.99% to $83.95, while WTI futures rose 8.75% to $77.46 per barrel.
By Julian Geiger for Oilprice.com
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