Iraqi Kurdistan Restarts 230,000 bpd Oil Production Following Drone Attacks

Iraq’s Kurdistan region has successfully resumed oil production across all of its oilfields, with the exception of Sarsang, pushing output up to 230,000 barrels per day following a series of drone attacks during the war. Energy infrastructure damage had previously forced several oil and gas companies operating in the semi-autonomous Kurdistan region to halt their operations. The resumption follows a June request from Iraq urging companies to return to work.

Kamal Mohammed, Minister of Natural Resources in the Kurdistan Regional Government, confirmed on Saturday that production is back online and all companies have returned. The Iraqi News Agency quoted him stating that all oilfields have restarted aside from the Sarsang field, which suffered damage from multiple drone strikes and remains offline. Current oil production ranges between 220,000 and 230,000 barrels per day, with a portion allocated for domestic consumption.

As Opec’s second-largest producer, Iraq faced severe economic impacts after the blockade of the Strait of Hormuz began with the regional war on February 28. Pre-war export averages of roughly 3.4 million bpd collapsed when the conflict started. However, Iraqi Oil Minister Bassem Khudair noted that exports have rebounded since early August to average about 2 million bpd, aided by alternative export routes.

Additionally, Iraqi President Nizar Amidi stated on August 22 that Iran permitted several Iraqi oil tankers to pass through the Strait of Hormuz following repeated requests from Baghdad. Iran's state news agency, Irna, confirmed that Tehran authorized multiple Iraqi oil tankers to cross the waterway.

Addressing refining capacity, Mr Mohammed emphasized the necessity of boosting oil refining within the Kurdistan region. Noting that current refining sits at 50,000 bpd against a local demand of 140,000 bpd, he highlighted a cost disparity where federal government refining costs are about $4 per barrel compared to $16 for the Kurdistan Regional Government. He added that aligning supply costs could lower local petrol prices from the current 750 dinars per litre down to 450 dinars.