Iraq halts production at giant Rumaila oilfield as Hormuz closure chokes exports

Iraq on March 3 shut down production at the Rumaila oilfield, the country's largest and the second-biggest in the world, after the closure of the Strait of Hormuz choked off exports and sent storage levels to critical capacity.

Iraq’s army has reinforced security around Basra fields including Rumaila amid militia threats and regional escalation as strikes by Iran continue across the Persian Gulf including Kuwait. 

Local sources told Shafaq News that all wells at the field had ceased production entirely. A document issued by Basra Oil Company, obtained by Shafaq News, directed the Rumaila field operating authority to cut output and pumping by 100% from 3pm on March 3.

The company's operations division cited "extremely serious international political events" and the resulting closure of the Strait of Hormuz, which had disrupted international shipping and caused oil tankers to refuse to enter the Gulf.

The halt in exports led to a severe shortage of tankers at Iraq's southern ports and a stoppage in loading at some terminals, pushing stored crude in onsite tanks to critical levels, the document said.

The decision to suspend production was described as temporary, pending a stabilisation of conditions and a resumption of shipping operations.

The shutdown at Rumaila, which typically produces around 1.5mn barrels per day (bpd), marks one of the most significant disruptions to Iraqi oil output in decades and underscores the widening economic fallout of the US-Israeli military campaign against Iran.