March 09, 2026 [Reuters]- Iraqi oil production from its main southern oilfields has fallen by 70% to just 1.3 million barrels per day as the country is unable to export oil via the Strait of Hormuz ​due to the Iran war, three industry sources said on Sunday.

Production from ​the fields stood at around 4.3 million bpd before the war.

“Crude storage ⁠has reached maximum capacity and the remaining output after the major cut will ​be used to supply the country’s refineries,” said an official with the state-run Basra ​Oil Company (BOC), which manages production and export operations from the southern fields.

The Strait of Hormuz is one of the world’s key oil transit chokepoints, carrying roughly a fifth of global oil and ​liquefied natural gas flows.

The OPEC member’s exports also fell sharply to an average of ​around 800,000 barrels per day on Sunday, with only two tankers loading because vessels cannot move ‌freely ⁠through the strait to Iraq’s southern terminals, the source said.

The two tankers, Cospearl Lake and Yuan Hua Hu, each completed loading about 2 million barrels of crude at around 8 p.m. local time (1700 GMT), and with no new vessels arriving, oil flows ​from Iraq’s southern export ​terminals were halted, ⁠three oil officials and a shipping agent told Reuters.

Iraq’s oil exports from the southern oilfields stood at 3.334 million barrels per ​day in February, an oil ministry document showed.

A drop in ​Iraq’s oil ⁠production and exports is set to strain the country’s already fragile finances, as the state relies on crude sales for nearly all public spending and more than 90% of ⁠its income.

“This ​is the most serious operational threat Iraq has ​faced in more than 20 years,” a senior Iraqi oil ministry official said.