Baghdad: Iraq has suffered a significant decline in oil production, losing approximately 302.8 million barrels in the first half of 2026 due to ongoing regional conflict affecting the Strait of Hormuz. The country’s total production during this period was about 440.3 million barrels, according to the Economic Monitoring Center (Eco Iraq), highlighting the severe impact of geopolitical tensions on the nation’s oil industry.

According to National Iraqi News Agency, Eco Iraq detailed how normal production levels, which averaged over 4.1 million barrels per day in January and February, drastically fell in the subsequent months. The report noted that the average daily production was 4.097 million barrels in January and 4.140 million barrels in February. However, production plummeted to 1.906 million barrels in March, further dropping to 1.633 million barrels in April, reaching a nadir of 1.406 million barrels per day in May, before slightly recovering to 1.525 million barrels per day in June.

The Observatory underscored the critical need for Iraq to develop alternative export routes to mitigate the effects of such geopolitical disruptions. It suggested projects like the Damascus-Iraq Highway as potential solutions to stabilize oil production and shield the economy from future crises.

Energy and geopolitical analysts have expressed concern that Iraq is among the most vulnerable nations if disruptions in the Strait of Hormuz persist. With oil flows from the Gulf reduced to about 50% of pre-war levels, equivalent to a decline of at least 10 million barrels per day in regional supplies, existing alternatives, like pipelines, fall short of compensating for lost output. Proposed projects through Syria or Turkey could take two to four years to become operational, exacerbating economic strain.

Experts warned that the ongoing conflict could spur a global pivot towards renewable energy, electric vehicles, and nuclear power, posing a long-term threat to the economies of oil-dependent countries such as Iraq, the Gulf states, and Iran. The situation has resulted in rising oil prices and diminished export revenues due to reduced volumes and logistical challenges in accessing global markets.