Oil Price Trends | Iraq Reportedly Declares Force Majeure on Foreign-operated Oil Fields

SighingCashier · 2026-03-21T04:45:48+00:00

Due to regional military operations, Iraq declared force majeure on oil fields developed by foreign oil companies, resulting in the interruption of most crude oil exports and storage reaching capacity limits. The Ministry of Petroleum ordered production shutdowns in affected areas without causing financial losses to the companies, and arranged emergency consultations with the companies. Basra Company's crude oil production was significantly reduced to 900,000 barrels.

SighingCashier

2026-03-21 04:45:48

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Reuters, citing three energy officials directly involved in the decision, said that Iraq has declared force majeure on all oil fields developed by foreign oil companies after regional military actions disrupted shipping through the Strait of Hormuz, causing most of Iraq’s oil exports to halt.

In a letter dated March 17, Iraq’s Ministry of Oil stated that navigation through the Strait of Hormuz has been severely affected by unprecedented military activity; most of Iraq’s oil exports are transported via this strait, and the disruption has led to storage capacity reaching its limit.

The letter said that although the Iraq National Oil Marketing Organization (SOMO) has prepared ships for loading, international partners are unable to assign tankers to transport the oil, resulting in export disruptions.

Given the current situation, the ministry has ordered a complete halt to production in affected licensed areas, with no compensation under contractual terms. The ministry stated that it will regularly assess production cuts based on regional developments and has invited companies for emergency consultations to reach agreements on necessary operations, costs, and staffing under force majeure conditions.

According to a statement released on Friday, Iraq’s Oil Minister said that with exports from southern ports halted, Basra Oil Company’s crude oil production has been reduced from 3.3 million barrels per day to 900,000 barrels. The produced crude is being transported to operational refineries.

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