Iraq halts KRG oil exports via Kirkuk-Ceyhan pipeline amid regional conflict

As the conflict ignited by US-Israeli strikes on Iran spreads across the Middle East, and the de facto closure of the Strait of Hormuz sends shockwaves through energy markets, Iraq has suspended oil exports from the Kurdistan Regional Government (KRG). The decision has removed approximately 200,000 barrels per day (bpd) from the market.

The Baghdad administration has halted crude oil exports conducted via the Kirkuk-Ceyhan pipeline by the Kurdistan Regional Government (KRG). According to a Bloomberg report dated March 3, the decision was prompted by producers scaling back output due to the escalating war in the Middle East.

Sources close to the matter indicated that approximately 200,000 bpd have been withdrawn from the market. Production has reportedly dropped to approximately 50,000 bpd, a volume now reserved for domestic consumption.

The Kirkuk-Ceyhan line, which transports oil from northern Iraq to Türkiye’s Mediterranean port of Ceyhan, remains a critical export route for the KRG, serving as a vital conduit for access to international markets and a primary source of foreign exchange revenue.

Sources noted that petroleum companies are reducing production as a “precautionary measure,” highlighting the growing instability across the region. Authorities have adopted a “safety-first” approach to protect personnel and energy infrastructure against potential attacks.

Energy infrastructure targeted in the Gulf

The decision to halt exports from Iraq comes amid heightened regional tensions following US and Israeli strikes on Iran.

Concurrently, the Popular Mobilization Forces in Iraq have intensified attacks on US bases.

The escalating risk of attack and the potential for the war to widen poses a direct threat to critical energy infrastructure, including the Kirkuk-Ceyhan export pipeline.

Meanwhile, Iranian retaliatory strikes on energy facilities in Qatar and Saudi Arabia, coupled with the de facto closure of the Strait of Hormuz, have unleashed a fresh shockwave across global energy markets.

Following Iranian missile strikes targeting the Ras Laffan and Mesaieed facilities, QatarEnergy announced a suspension of liquefied natural gas (LNG) production.

The Ras Tanura refinery in Saudi Arabia was also targeted by a drone strike. While Iran has denied responsibility for the attack, the developments have caused Brent crude prices to surge 13% to over $82 per barrel, while natural gas prices have climbed 25%.

According to data published by energy intelligence firm Kpler, tanker transit through the Strait of Hormuz has effectively come to a standstill.

With approximately 150 tankers stalled at the strait, roughly one-fifth of the global oil flow has been disrupted. Furthermore, insurance companies have rescinded coverage for vessels traversing the waterway, severely impeding maritime transport.