Basra Oil Chief: Iraq could return oil exports within a week to the pre-war levels if Hormuz is reopened.

* Iraq's oil production has been reduced by around 80%

The storage has filled as the Strait of Hormuz closed and prevented exports

* Iraq exports more oil than it produces, giving it the opportunity to increase its exports even when some of its capacity is damaged

Aref Mohammed

BASRA (Iraq), April 6 - Iraq's crude oil exports could be restored to around 3.4m barrels per day in a week if the Iran War ends and the Strait of Hormuz is reopened, according to the head of Basra Oil Company, the state-run company of Iraq.

A study found that Iraq suffered the largest drop in oil revenues among 'Gulf' oil producers due to the closure of the Strait. This is because Iraq lacks other shipping routes.

The country is the second largest producer of oil in the Organization of Petroleum Exporting Countries. It can quickly return to the levels of production before the U.S. and Israeli attacks on Iran ended February, which led to the closure of the waterway. About a fifth (or more) of all global oil and LNG flows pass through the Strait.

So far, Iran has only made verbal promises

Bassem Abdulkarim stated that Iran has only provided verbal assurances to allow Iraqi oil tankers permission for transiting the?Strait.

In an interview, he stated that he had not received any official documents granting permission to Iraqi tankers.

He said that the production of Iraq's southern oilfields is around 900,000. barrels per day. However, if the War ends and safe passage across the Strait can be guaranteed, exports could reach as much as 3.4 million barrels per day within a week.

Donald Trump, the U.S. president, has threatened to "rain hell" on Tehran until it strikes a deal that allows traffic through the Strait of Hormuz by Tuesday's end.

STEEP DROP IRAQI OIL OUTPUT

Iraqi energy officials said last month that Iraq's oil output dropped by 80%, to about 800,000 barrels a day. The war prevented Iraq from exporting and filling storage tanks.

Abdul Karim stated that due to the limited supply of Iraqi oil, the production at the Rumaila Field fell from 1.35 million barrels per day (bpd) before the conflict to about 400,000 bpd. At the Zubair Field, the level was around 300,000 bpd - down 340,000 before the war.

He said that some smaller fields were operated at a limited level to maintain the production of gas used for domestic power generation. Other sites, however, had been shut down to allow maintenance to be carried out.

Even with war-related damages, the production from Iraqi fields was around 4 million bpd. This should allow for an export of 3.4 million BPD.

Abdul Karim stated that the reduction in oil production is the main reason for the drop in gas output. Before the war, the fields produced 1.1 billion standard cubic feet (mscf) per day.

Meeting Refinery Demand

BOC sends around 400,000 barrels per day of crude oil to northern Iraq in order to meet domestic demand. This includes approximately 150,000 bpd of crude oil by truck, and about?250,000 via a pipeline in the country to supply refineries with a demand of around 500 000 bpd.

Abdul Karim, a Kirkuk oilfields expert, said that the production from northern Kirkuk fields is approximately 380,000 barrels of crude oil per day.

Abdul Karim, when asked about the impact drone attacks had on production and oil operations, said that strikes on oil installations had caused "major loss to the continuity of oil operations and production," adding that both foreign service companies and Iraqi ones had been 'targeted.

Security and energy sources reported that a two-drone attack on the Rumaila Oilfield Saturday injured?three Iraqi employees.

Abdul Karim stated that the attack on northern Rumaila hit sites used for U.S. oilfield service companies Schlumberger, and Baker Hughes. This caused a fire which was later controlled.

No comment was given by Schlumberger or Baker Hughes in response to our requests. (Reporting and writing by Ahmed Rasheed in Basra, with additional reporting by Aref Mohammad; Editing by Barbara Lewis.

(source: Reuters)