Commodities March 4, 2026

Iraq slashes crude output by more than half as storage nears capacity and tankers avoid Strait of Hormuz

Deep cuts at Rumaila, West Qurna 2 and Maysan; Kirkuk output suspended as exports are constrained

By Derek Hwang
Iraq slashes crude output by more than half as storage nears capacity and tankers avoid Strait of Hormuz

Iraq has reduced oil production across several major fields by more than 50% after onshore storage reached capacity and maritime carriers are steering clear of the Strait of Hormuz following attacks on shipping. Authorities have cut output at Rumaila, West Qurna 2 and Maysan, and suspended crude flows from the Kirkuk region as a precaution, limiting the country's ability to move cargoes to market.

Key Points

  • Iraq has reduced crude production at major fields by more than half due to storage capacity limits and shipping disruptions.
  • Specific field cuts: Rumaila down 700,000 bpd, West Qurna 2 down about 450,000 bpd, and Maysan down about 350,000 bpd; Kirkuk output suspended as a precaution.
  • Sectors affected include oil production and exports, maritime shipping through the Strait of Hormuz, and markets dependent on Iraqi crude supply.

Iraq announced substantial reductions in crude output as storage facilities approach their limits and international tankers avoid transiting the Strait of Hormuz amid recent attacks on shipping, Iraqi oil officials said on Wednesday.

The cuts were concentrated at several of the country’s largest producing fields. Output at Rumaila - Iraq’s biggest oilfield - was lowered by 700,000 barrels per day. West Qurna 2 experienced a decline of roughly 450,000 barrels per day, and production at the Maysan field was trimmed by about 350,000 barrels per day, officials said.

In addition to those reductions, Iraq has halted crude production from the Kirkuk region in the north as a precautionary step, according to the same officials. The suspension and the field-specific cuts together represent a reduction in national flow volumes exceeding half of previously reported production levels.

Officials linked the production curbs to two operational constraints. First, onshore storage capacity is running out, limiting the ability to hold additional crude. Second, tanker operators are avoiding the Strait of Hormuz following attacks on shipping in the waters nearby, which is restricting Iraq’s capacity to export barrels through its usual maritime routes.

The combined effect of constrained storage and reduced tanker transits has directly affected Iraq’s capacity to place cargoes on international markets. By slowing output at major fields and suspending flows from Kirkuk, Baghdad has sought to prevent further accumulation of crude in storage and to respond to the logistical challenges posed by shipping disruptions.


Operational snapshot

  • Rumaila: -700,000 barrels per day.
  • West Qurna 2: approximately -450,000 barrels per day.
  • Maysan: approximately -350,000 barrels per day.
  • Kirkuk: production suspended as a precaution.

The situation reflects a short-term operational response by Iraqi oil authorities to immediate storage and shipping constraints. Officials described the moves as measures to manage physical flows in the face of accumulating inventories and maritime avoidance by tankers following attacks on vessels in the region.

Risks

  • Export bottlenecks from tanker avoidance of the Strait of Hormuz could prolong constraints on Iraq’s ability to move crude to market - impacting the shipping and export sectors.
  • Saturated onshore storage limits Iraq’s short-term flexibility to continue lifting production without additional storage or resumed tanker transits - affecting domestic producers and refiners reliant on steady flows.
  • The precautionary suspension of Kirkuk production introduces uncertainty around near-term supply volumes from the northern region - relevant to market participants tracking regional output.

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