Iraq could restore oil production and exports within a week after the Strait of Hormuz reopens, an official from state-owned Basra Oil Company has said, as quoted by Reuters.
“We have not received any formal documents regarding permission for Iraqi tankers to pass,” Bassem Abdul Kassim told the publication in an interview, adding that Iraq had only received verbal guarantees for safe passage for tankers from the Iranian side.
He went on to report that oil production from Iraq’s fields in the south had fallen to 900,000 barrels daily, but the country could guarantee an export rate of 3.4 million barrels daily—pre-war levels—if the hostilities between the U.S. and Israel, and Iran ended. The current rate of production, however, is an improvement from last week, when the total from the southern fields stood at 800,000 barrels daily, Reuters noted in its report.
Iraq has suffered the most severe blow to its oil revenues from the closure of the Strait of Hormuz because, unlike Saudi Arabia, it has no alternative export venues. Because of that, it has had to slash production considerably after it ran out of storage space for the crude already produced.
The report comes amid another escalation in rhetoric from President Trump, who threatened Iran with “hell” if they did not reopen the Strait of Hormuz, while Pakistan proposed a ceasefire plan to the two warring sides, which Iran promptly rejected, insisting on a permanent peace deal. The outlook, therefore, remains quite negative.
Earlier in the week, two LNG carriers loaded with Qatari gas attempted to pass the chokepoint but, according to reports out Monday, had to U-turn and “hold position”, according to an unnamed source who spoke to Reuters. The source said the two vessels had been allowed to pass Hormuz under a deal mediated by Pakistan last week.
By Irina Slav for Oilprice.com
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