Iraq’s oil sector is poised for a rapid rebound once the Strait of Hormuz reopens, with officials claiming production could hit pre-war levels in just a week, even as new pipelines promise to wean the country off the vital chokepoint.
Iraq’s state-run Basra Oil Company states the nation could restore crude exports to 3.4 million barrels per day (bpd) within seven days of the strait becoming navigable again. Pre-conflict exports hovered at that level, but output has since cratered. By early March, production dipped to 1.3 million bpd from 4.3 million bpd, per Anadolu Agency. Oil Minister Hayan Abdul Ghani noted in March that Iraq would sustain about 1.4 million bpd, mostly for domestic refineries. Late April saw exports linger at 800,000 bpd, bolstered by an Iranian exemption for transit.
With over 90% of its budget tied to oil, the Hormuz blockade, triggered by the U.S.-Israeli war on Iran in late February, has hammered Iraq’s finances. Skeptics argue full field restarts could drag on for months, not days.
Pipelines to Sidestep the Strait
To break free from Hormuz reliance, Iraq broke ground on the $5 billion Basra-Haditha pipeline, a 700-km artery to pump 2.5 million bpd to terminals in Turkey, Syria, and Jordan. Phase one, costing $1.5 billion, links southern fields to Turkey’s Ceyhan port, Syria’s Baniyas, and Jordan’s Aqaba. Prime Minister Mohammed Shia al-Sudani greenlit the project in 2024 as insurance against disruptions.
Meanwhile, the Kirkuk-Ceyhan pipeline nears full revival at 600,000 bpd capacity, with repairs wrapping up. Kurdistan flows have already hit 400,000 bpd since March. The line, scarred by the 2014 Daesh attacks, could exceed 1 million bpd once online. Together, these northern and western routes could enable multi-million bpd exports sans Hormuz — Iraq’s biggest strategic pivot since the 1980s Iran-Iraq War.
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