The $100 per barrel debate is now back on the table after Iraq started closing oil production at major southern fields, including the giant Rumaila Oil Field, as tanker movement through the Strait of Hormuz remains effectively stranded due to the frantic war-like situation in the Middle East region.
Production at Iraq’s West Qurna 2 is also being curtailed, with approximately 460,000 barrels per day shut in, Iraqi state agencies said.
Contrary to the unrest caused by the US-Israel attack on Iran, Iraqi officials are citing disrupted navigation and a shortage of available tankers as the key reasons behind the cuts. Storage tanks at southern export terminals are nearing capacity, forcing producers to scale back output to prevent logistical bottlenecks, they said.
Separately, a drone strike targeted the Port of Fujairah, the UAE’s largest oil export hub located outside the Strait of Hormuz. No catastrophic structural damage has been officially confirmed, but the incident has raised concerns for the Gulf energy infrastructure.
The Strait of Hormuz accounts for roughly one-fifth of global oil shipments. Any sustained disruption to traffic through the waterway is likely to tighten global crude supply, particularly affecting Middle Eastern exports destined for Asian markets.
Oil prices surged amid rising geopolitical risk. As of 09:00 PM (Pakistan Standard Time) on Tuesday, Brent crude futures climbed over 7 percent to $83.4 per barrel, while West Texas Intermediate (WTI) futures rose 7.65 percent to $76.7 per barrel.
