Oil prices rise as Iraq’s Hormuz shipments collapse amid conflict
Investing.com — Iraq’s crude oil exports through the strategic Strait of Hormuz plummeted to just 10 million barrels in April, down from its historical baseline of approximately 93 million barrels monthly before the outbreak of the Iran war.
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Iraq’s new oil minister, Basim Mohammed, announced the oil export figures at a press conference on Saturday.
According to a Reuters report, the almost complete closure of the vital shipping chokepoint due to the ongoing conflict has severely curtailed total aggregate exports from dominant regional producers, including Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq, sending global crude benchmarks sharply higher.
To mitigate the maritime export constraints, Baghdad has turned to overland infrastructure, successfully resuming crude flows through the Kirkuk–Ceyhan oil pipeline in March following a comprehensive regulatory agreement between Baghdad and the Kurdistan Regional Government.
“We export 200,000 barrels through Ceyhan port, and we have a plan to increase it to 500,000 barrels,” Mohammed stated.
Looking ahead, the minister noted that Iraq plans to actively engage with OPEC to boost the country’s overall production and export capacity, emphasizing that Baghdad aims to eventually reach a steady production capacity of 5 million barrels per day.
These severe geopolitical disruptions building up over the weekend capped off a resilient weekly performance for energy benchmarks.
Global benchmark WisdomTree Brent Crude Oil (LON:BRNT) settled up 1.2% at $83.80 a barrel, while U.S. West Texas Intermediate Crude Oil WTI Futures gained 1.4% to close at $79.50 a barrel.
The positive weekly settlement marked a firm turnaround after initial downward pressure from the U.S. Energy Information Administration (EIA), which had reported a surprise 1.8 million barrel build in domestic commercial crude stockpiles.
The underlying fundamental drivers prompting the broader market rally stem from the escalating conflict in the Middle East, with restricted maritime traffic along critical shipping corridors forcing energy traders to reprice severe supply risk premiums.
Concurrently, market sentiment caught a lift from preliminary OPEC+ compliance data, indicating that member nations are deepening their commitment to voluntary output cuts of 2.2 million barrels per day ahead of their upcoming ministerial review.
Despite a restrictive macroeconomic backdrop sustained by the Federal Reserve’s prolonged high-interest-rate environment, robust physical crude buying across Asian markets signaled underlying demand resilience, helping to offset broader global growth anxieties.
