Crude oil production from Iraq\u2019s southern fields has dropped by 70% since the start of the U.S. and Israeli war on Iran, with the average daily production at 1.3 million barrels, compared with 4.3 million barrels daily before the war began.<\/p>\n
\u201cCrude storage has reached maximum capacity, and the remaining output after the major cut will be used to supply the country’s refineries,\u201d an official from Basra Oil Company told<\/a> Reuters. The company is the state-owned entity that markets Iraq\u2019s southern oil, which accounts for most of its production.<\/p>\n Iraq was the first major producer to resort to production cuts because of tanker traffic disruption in the Strait of Hormuz. The cuts began last week, with warnings from analysts that other producers would follow suit when their storage reaches its limits as well. Indeed, Kuwait and the UAE were the next to announce<\/a> oil production cuts in response to the paralysis of traffic in the Strait.<\/p>\n Iraq is still loading crude for export, but nowhere near previous rates, the Reuters report noted. On Sunday, only two vessels were loaded at Iraq\u2019s terminals in the south, each with about 2 million barrels. One of the vessels is Hong Kong-flagged Cospearl Lake, and the other is a China-flagged VLCC named Yuan Hua Hu. According to Marine Traffic<\/a>, both vessels are still in the Persian Gulf.<\/p>\n Reuters reports that Iraq\u2019s average daily oil exports have plummeted from over 3.33 million barrels daily to just 800,000 barrels daily as of Sunday. \u201cThis is the most serious operational threat Iraq has faced in more than 20 years,\u201d the publication cited an Iraqi oil ministry official.<\/p>\n The oil and gas supply disruption in the Gulf resulting from the U.S. and Israeli war with Iran has pushed Brent crude<\/a> over $116 per barrel earlier today, with WTI<\/a> also reaching that price level, before both retreated to below $110 a barrel. Meanwhile, Middle Eastern Murban has soared to over $120 per barrel.<\/p>\n By Irina Slav for Oilprice.com<\/p>\n