Iraq Oil Output Plummets 60% as Hormuz Blockade Forces Search for New Routes

Amid escalating geopolitical tensions threatening global energy security, Iraq's oil production collapsed to 1.39 million barrels per day in April due to the blockade of the Strait of Hormuz. According to reports, Iraq is urgently seeking to revive northern export routes through Turkey, including the Kirkuk-Ceyhan pipeline system, to clear stranded inventories. Chinese firms are also heavily involved in expanding the north-south pipeline infrastructure to provide much-needed export flexibility.

This crisis hits at a critical moment for energy markets, as Iraq relies on oil for 90% of its national budget, placing immense pressure on the country's fiscal stability. In comparison to regional peers, market data shows Saudi Aramco (2222.SR) trading at 28.45 SAR (close May 26, 2026), while investors are closely monitoring the exposure of Chinese energy giants like PetroChina (0857.HK) which is leading the current infrastructure expansion efforts in Iraq.

Traders should watch PetroChina (0857.HK) shares, which stood at 6.12 HKD (close May 26, 2026), as negotiations over the Turkish export route progress. Looking ahead, the upcoming EIA Weekly Petroleum Report (May 20, 2026) will be a key catalyst, as it may reveal the extent of global supply tightening caused by the Iraqi export halt, potentially driving further volatility in crude prices.