Oil industry of Iraq
Summary
Iraq is a member of OPEC. Iraq has participated in OPEC+ agreements on oil production restrictions.
Iraq accounts for 8% of global crude oil reserves.
Iraq and all its oil-related matters have been controlled by US authorities since its occupation in 2003. After the withdrawal of the occupying forces, the level of control has decreased. In recent years, Iran's influence, including on the Iraqi oil industry, has increased.
Map of the oil industry
Crude Oil Production
After US invasion into Iraq in 2003, oil production in northern Iraq in Kurdistan became conditionally independent from the federal authorities in Baghdad. Over 20 years, the regional government has concluded many contracts. In 2023-2025, the federal authorities have launched an active campaign to regain federal control over the production and export of Kurdish oil. As a result, the agreements with foreign oil companies from 2006-2022 on the production and export of oil from Kurdistan have been revised.
Western Qurna-2
The field is being developed by Lukoil (operator with a 75% share) and the local Kurdish authorities (25% share). The recoverable oil reserves amount to 1.8 billion tons of oil. The production in 2025 was 63,000 tons per day.
Oil production at the field is highly politicized and depends on the relationship between the regional Kurdish authorities and the federal authorities in Baghdad, the export of Iraqi oil through Turkey to Ceyhan, and the US attack on Russian oil companies.
In 2025, Lukoil was blacklisted, leading to the declaration of force majeure by the operator on 08.11.2025 and the suspension of production. In November, the Baghdad federal authorities “transferred” control of the field to the Oil Company of Bastry and the Oil Company of Maisan. It was reported that the US government wanted to take control of the field from the oil companies in the US. On December 9, 2025, oil production resumed at the field. Chevron from the US will begin working at the West Qurna-2 field as an operator in March 2026. The ousting from the operator role was carried out by means of pressure on all financial and operational structures of Iraq in terms of termination of work with Lukoil, which de facto did not leave Lukoil's local daughter any chances for operational work.
Eridu
This field is one of the largest in Iraq.
Lukoil owns 60% of the rights to this field. The rest belongs to the Japanese Inpex. A deal is being discussed on the purchase of a stake by Lukoil from the Japanese company.
In August 2024, Lukoil received permission from the state-owned oil company Di-Kar of the same name in Iraq to begin production at the Eridu field. Production is expected to begin in 2025 at a rate of 34 ktd (12.5 MTPA). By 2029, the target production rate is expected to reach 48 ktd (17.5 MTPA).
Crude Oil Exports
Annual export volume is about 114 trillions of Iraqi dinars (320 bAED / 600 bCNY / 7 tRUB in equivalent ) per year. The export of petroleum products accounts for about 92% of all Iraqi government revenues.
Key buyers are China and India. Asia, in general, accounts for about 62% of all Iraqi crude oil exports.
There have been attempts to abandon the dollar in oil exports. In the early 2000s, Saddam Hussein made such an attempt, which led to his assassination by US forces. In 2024, Iraq's parliamentary financial control commission once again proposed abandoning the dollar in oil transactions.
Türkiye
Oil from northern Iraq, mainly Kurdistan, is exported through the Turkish port of Ceyhan.The pipeline's capacity is 64,000 tons per day (23.5 million tons per year.
In March 2023, an arbitration court in Iraq decided to stop exporting Kurdish oil to the Turkish port of Ceyhan without Baghdad's approval. This decision led to the suspension of supplies of 50-65 thousand tons per day.
In September 2025, oil exports from Iraqi Kurdistan resumed after a two-year hiatus. The initial volume of Kurdistan oil exports through the Turkish port of Ceyhan is expected to be 25,000 tons per day. This is equivalent to one Aframax-class tanker every four days. The Baghdad-based State Oil Marketing Organization (SOMO) will now play a central role in marketing Kurdistan oil. This marks a victory for the central government over the regional Kurdish government.
Syria and Lebanon
In 2025, the Iraqi Ministry of Oil began considering the possibility of exporting oil through the Lebanese port of Tripoli and resuming oil exports from Iraq to Syria via pipeline.
Jordan
Jordan imports approximately 1.4 thousand tons per day from Iraq (as of 2024). The imports are carried out under intergovernmental agreements. Iraqi oil accounts for approximately 7% of Jordan's total oil consumption.
Export of Petroleum Products
High-sulfur straight-run fuel oil
Iraq has been the leading global supplier of this type of fuel oil since 2022. Previously, Russia was the leading supplier of this type of fuel oil worldwide.
Supply volume by year:
2021 - 20 ktd.
2022 - 27 ktd.
2023 - 41 ktd.
2024 - 50 ktd.
In 2024, 65% of the supplies were sent to neighboring countries in the Middle East. Iraq has become the third-largest supplier of high-sulfur fuel oil to the world's largest physical trade hub, Singapore Strait. Iraq is the leading supplier of high-sulfur fuel oil to Fujairah. Additionally, significant volumes are sent to Chinese cities such as Zhoushan and Hong Kong, which are also major ship bunkering centers.
According to market rumors, a significant portion of Iraqi fuel oil exports is controlled by Iranian oil companies. It is possible that Iraqi fuel oil is blended with Iranian fuel oil as a counterbalance to Western pressure on Iran.
Georgia
Iraqi companies supply bitumen to Georgia.
Impacts of Wars
Iraq faces regular attacks on its oil fields and refineries.
2024
On 16.01.2024 owner of the Falcon Group (https://falconiraq.com/about) and Empire (https://empireworld.com/) oil companies,Peshrav Dzeyi, was killed as a result of Iran's attacks on Erbil (Kurdistan, Iraq). He was Kurdish-ethnic businessman, collaborating with Israeili Mossad.
War of Isreal and USA against Iran in 2025
One of the consequences of the Israeli-US War against Iran in June 2025 was departure of employees from Western oil companies working in the country due to deteriorating security conditions. Number of specialists who left in June 2025 alone is estimated at 4860. The largest number of employees left British BP (1700), French TotalEnergies (1000), US Schlumberger (700), Italian Eni (560) and US ExxonMobil (400).
War of Isreal and USA against Iran in 2026
11.03.2026 - two tankers were attacked in a port during STS of gas condensate and/or naphtha: Safesea Vishnu (9327009), owned by a small shipping company Safe Sea (USA), and Zefiros (9515917), owned by a small private Greek shipping company. The tankers were damaged by fire and may have burned completely.
14.03.2026 - Lazan Refinery in Kurdistan was attacked and damaged. Fire spreaded across the plant. Refinery suspended operations.
Notes:
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