Iraq oil exports drop 75% amid Hormuz closure

Baghdad (IraqiNews.com) — Iraqi Oil Minister Hayan Abdul-Ghani announced on Saturday, August 8, 2026, that the nation’s crude oil exports have plummeted by 75% due to the ongoing closure of the Strait of Hormuz and regional military escalations. The severe drop in oil revenues has triggered a liquidity squeeze across the federal government, causing widespread delays in state employee salary disbursements.

Speaking at a press conference in Baghdad, Abdul-Ghani revealed that Iraq is currently exporting only a quarter of its pre-war volumes, which stood at approximately 3.5 million barrels per day (bpd) prior to the outbreak of regional hostilities on February 28. He noted that while Baghdad has engaged in diplomatic talks with Iran to permit the passage of Iraqi oil shipments through the Gulf, no operational agreement has been activated.

Key financial and operational highlights

• Export Collapse: Iraq’s crude exports have fallen to ~25% of pre-war capacity, cutting off the primary source of state revenue.
• Fiscal Pressure & Salary Delays: Reduced export volumes and below-budget sale prices have caused acute liquidity shortages, delaying public sector payrolls.
• Corporate Damage Compensation:
  • Domestic Attacks: Baghdad has agreed to compensate foreign energy companies for damages resulting from attacks originating inside Iraqi territory.
  • External Strikes: The government declared itself legally exempt from compensating firms for damages caused by foreign strikes or broader military actions beyond state control.
• Alternative Export Bypasses: Baghdad is fast-tracking pipeline infrastructure projects bypassing the Persian Gulf, including routes south toward Turkey’s Ceyhan port, Syria’s Baniyas terminal, and Jordan’s Aqaba port.

To maintain minimal cash flows, Iraq is currently forced to sell its crude at deep price concessions below the baseline benchmark set in the national budget, compounding treasury deficits.

In response to the prolonged maritime chokehold in the Strait of Hormuz, the Ministry of Oil is accelerating infrastructure development along overland export routes.

Priority has been placed on expanding and constructing pipeline corridors connecting southern production hubs to the Mediterranean via Syria and Turkey, alongside long-term transit planning toward the Red Sea via Jordan.