Iraq’s Oil Exports Collapse Due To Iran War

  

In March Iraq’s oil exports hit the lowest volume since the 2003 invasion due to the Iran War. The conflict is not over yet threatening the industry’s attempt to restart production. This is causing a financial crisis for the most oil dependent country in the world.

 

In March Iraq only sold an average of 600,000 barrels a day of petroleum. That was the lowest amount since June 2003. (1) In comparison, the country exported 3.567 million barrels in February.

 

Earnings took a hit as a result. Oil revenue went from $6.815 billion in February to just 1.957 billion in March.

 

This is a huge problem for Baghdad’s finances. In 2025 it spent an average of $6.5 billion a month just to pay public salaries, pensions and welfare programs.

 

Even before the war the government was having problems meeting these bills. Foreign Minister Fuad Hussein said that the state was facing a deficit every month paying salaries this year. This will lead to borrowing from Iraqi banks.

 

Iraq is still in trouble. On April 18 the Oil Ministry said that all fields were getting ready to resume exports as the U.S. and Iran were on the cusp of a deal that would open the Strait of Hormuz Baghdad’s main export route. Later in the day however Tehran shut down the Strait again because the Americans had not ended its blockade of Iranian ports.

 

As a result an Indian tanker with two million barrels of Iraqi oil was turned around by Iran as it tried to exit the Strait. The ship had been docked in Iraq since early March. There are two more tankers that have been contracted that are waiting to enter the Strait.

 

There is no telling whether or when Washington and Tehran will come to an agreement.

 

Even when the Strait is re-opened the nation’s oil industry will take time to ramp up production and start exporting at the same levels. The authorities have claimed that output can be back to pre-war levels in just days but analysts say it could take months. That will mean more budgetary problems.

 

Federal Oil Exports, Prices, Revenues 2021-2024

Month	Avg Export (Mil)	Earnings (Bil)
2021 Avg	3.019	$6.303
Jan 2022	3.203	$8.323
Feb	3.314	$8.544
Mar	3.244	$10.913
Apr	3.38	$10.554
May	3.3	$11.44
Jun	3.373	$11.505
Jul	3.303	$10.608
Aug	3.286	$9.784
Sep	3.292	$8.845
Oct	3.382	$9.258
Nov	3.329	$8.231
Dec	3.332	$7.709
2022 Avg	3.311	$9.64
Jan 2023	3.266	$7.663
Feb	3.184	$7.081
Mar	3.255	$7.506
Apr	3.288	$7.699
May	3.305	$7.325
Jun	3.335	$7.115
Jul	3.444	$8.294
Aug	3.423	$8.998
Sep	3.438	$9.422
Oct	3.534	$9.594
Nov	3.433	$8.482
Dec	3.486	$8.311
2023 Avg	3.365	$8.124
Jan 2024	3.339	$8.026
Feb	3.434	$7.96
Mar	3.423	$8.65
Apr	3.413	$8.75
May	3.359	$8.14
Jun	3.41	$8.25
Jul	3.486	$9.08
Aug	3.414	$8.49
Sep	3.31	$7.11
Oct	3.327	$7.47
Nov	3.296	$7.01
Dec	3.259	$7.15
2024 Avg	3.372	$8.00
Jan 2025	3.298	$7.47
Feb	3.398	$6.7
Mar	3.441	$7.717
Apr	3.365	$6.738
May	3.278	$6.362
Jun	3.296	$6.698
Jul	3.379	$7.185
Aug	3.381	$7.160
Sep	3.405	$6.962
Oct	3.578	$7.031
Nov	3.553	$6.595
Dec	3.473	$6.388
2025 Avg	3.404	$6.917
Jan	3.471	$6.485
Feb	3.567	$6.815
Mar	0.6	$1.957

 

FOOTNOTES

 

1. O’Hanlon, Michael Campbell, Jason, “Iraq Index,” Brookings Institution, 4/2/09

 

SOURCES

 

Iraq Oil Report, "Iran reversal on Strait of Hormuz threatens Iraq’s nascent export restart,” 4/18/26

- “Wartime oilfield curtailments persist as Iraq pushes to revive southern exports,” 4/16/26

 

Al Mada, “Experts: Restoring Iraq’s Full Oil Export Capacity Could Take Months SOMO Asks Buyers to Prepare for Cargo Loading Schedules,” 4/12/26

 

Mahmoud, Sinan, “How oil-dependent Iraq can no longer pay the bills,” The National, 4/13/26

 

O’Hanlon, Michael Campbell, Jason, “Iraq Index,” Brookings Institution, 4/2/09

 

Salem, Amr, “Iraq’s oil exports decline to 600,00 bpd during March,” Iraqi News, 4/13/26

 

Al-Samarraie, Jawad, “Iraq to resume full oil exports: All fields ready for global contracts,” Iraqi News, 4/18/26