Iraq’s crude oil exports to the United States surged past 5 million barrels in May, marking Baghdad’s highest monthly volume to U.S. refiners so far this year, according to Iraqi News. The surge reflects sustained U.S. appetite for heavier Middle Eastern grades, with Iraqi crude averaging between 160,000 and 190,000 barrels per day last month.
As OPEC+ maintains voluntary output curbs and U.S. shale growth moderates, Iraq has solidified its position among Washington’s top five crude suppliers. According to the latest monthly report from OPEC’s Vienna-based secretariat (MOMR), Iraq reduced its oil production by 50,000 barrels per day, bringing its average daily output down to 3.93 million barrels, lower than its target of 4.049 million bpd, as it compensated for previous overproduction as one of the main overproducers alongside Kazakhstan and Russia, non-OPEC members of the OPEC+ pact.
Iraq’s export increase also provides critical fiscal relief for Baghdad, with crude sales accounting for roughly 90% of Iraq’s state revenue. Recent price support near $80 per barrel has further underpinned Iraq’s monthly revenues, helping finance public sector wages and infrastructure projects.
However, the oil export gains come against a backdrop of mounting geopolitical risk as the conflict between Israel and Iran threatens to destabilize the region. Although Iraq has officially declared neutrality, its geographic and political proximity to Tehran makes it highly vulnerable to spillover effects. In recent weeks, Baghdad temporarily closed its airspace in response to Israeli strikes on Iranian territory, underscoring fears of regional escalation.
Meanwhile, inside Iraq, Iran-backed militias, such as Kataib Hezbollah, have warned of potential attacks on U.S. interests should Washington increase its military role in support of Israel.
Any serious escalation could jeopardize Iraq’s critical southern export terminals near Basra, through which roughly 85% of Iraq’s crude flows to global markets. Further deterioration could disrupt Iraq’s fragile stability and threaten its recent oil export momentum.
By Charles Kennedy for Oilprice.com
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