Iraq boosts oil production capacity to three million bpd amid Strait of Hormuz attacks

Iraq has raised its crude oil production capacity to over three million barrels per day, maintaining hydrocarbon exports in September despite challenges in the Strait of Hormuz, according to the country's oil minister, Bassim Khudair. Opec's second-largest producer now aims to further increase output as alternative pipelines and improved export infrastructure come online, Khudair told the Iraqi News Agency.

The government plans to raise export capacity to five million barrels per day upon completion of strategic pipelines to Fishkhabour and Baniyas, as well as export terminals in the Strait of Hormuz. Iraq has been severely impacted by the Iran conflict, with Tehran effectively controlling the strait and attacking commercial ships. Oil exports have plummeted from around 4.2 million bpd in February, before the war began, to approximately 1.45 million bpd in three months, as per Opec data.

Despite the recent ceasefire between Iran and the US, attacks on shipping and hydrocarbon tankers through the strait have persisted since the deal's collapse. The US recently claimed it struck three Iranian oil tankers after Tehran targeted American naval vessels. No immediate signs of reopening the strait exist, prompting Iraq to negotiate direct passage for its tankers with Tehran.

In late August, Iraqi President Nizar Amidi reported Iran had granted permission for some Iraqi oil tankers to pass through the strait, though details of the agreement were not disclosed.

Iran's state news agency, Irna, confirmed that Tehran had granted permission to Iraqi vessels to cross the waterway following repeated Iraqi requests. Baghdad had sought passage for its exports through the strait during Iranian Parliament Speaker Mohammad Bagher Ghalibaf's visit to Iraq. Iraq has also signed an agreement with Syria for the Haditha-Baniyas oil pipeline, aiming to bypass the strait.