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

The head of Iraq's state-run Basra Oil Company has said that the country could resume crude oil exports in a week, provided the?Iran war ends and the Strait?Hormuz is reopened.

A study found that Iraq, the largest Gulf oil producer, has seen the greatest drop in its oil revenues as a result the closure of the Strait. This is because Iraq lacks other shipping routes.

The country can restore its output quickly to the levels it was before the U.S. and Israeli attacks on Iran, which occurred at the end of the month, led to the closure of the waterway. About a fifth (or more) of all global oil and LNG is transported through the Strait.

Bassem Abdul Karim stated that Iran has only made verbal promises to allow Iraqi oil tankers to transit the Strait.

In an interview with., he stated that "we haven't received any formal documents regarding the permission for Iraqi tanks to pass."

He said that the southern Iraqi oilfields produced around 900,000. If the war ended and safe passage across the Strait was guaranteed, exports could hit 3.4 million barrels per day within a week. Donald Trump, the U.S. president, has warned that he will rain "hell on Tehran" if it does not reach a deal with Tehran by Tuesday's end to allow for traffic through the Strait of Hormuz.

STEEP DROP OF IRAQI OUTPUT IRAQ'S OIL?PRODUCTION Last month, Iraqi officials said that the country's oil -production had dropped by 80%, to about 800,000 barrels a day. The war prevented Iraq from exporting and preventing storage tanks from being?filled.

Abdul Karim stated that due to the limited supply of Iraqi oil, the production at the Rumaila field dropped 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 compared with 340,000 bpd prior to the war.

He said that some smaller fields were operated at a reduced level to maintain the production of gas used for domestic power generation. Other sites 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 barrels per day (bpd) before the war. This should allow for an export of 3.4 million barrels per day.

Two Iraqi energy sources reported that storage has risen as the closure of Strait of Hormuz has blocked exports. However, Iraq produces more oil than it consumes at home, which allows it to increase shipments quickly without affecting the domestic supply immediately.

According to sources with direct knowledge of downstream operations, local refineries are fed primarily by ongoing production, rather than export tanks.

Abdul Karim stated that the reduction in oil production is largely responsible for the drop in gas output.

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?bpd through a pipeline in the United States to supply refineries with a demand of around 500 000 bpd.

Abdul Karim, a Kirkuk oil expert, said that the production from northern Kirkuk fields was approximately 380,000 barrels 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," and added that both foreign service companies and Iraqi ones had been "targeted." Security and energy sources said that a two-drone strike on the Rumaila Oilfield Saturday injured three Iraqi workers.

Abdul Karim stated that the attack on the northern portion of the Rumaila oil field affected sites used by U.S. companies Schlumberger, and Baker Hughes. This caused a fire which was then brought under control.

A Baker Hughes spokesperson stated that the company's top priority is personnel safety. All of its employees are safe and well-accounted for in the region.

Schlumberger didn't respond immediately to a query

Comment. (Reporting and writing by Ahmed Rasheed in Basra, Barbara Lewis and Susan Fenton; additional reporting by Aref Mohammad; edited by Barbara Lewis and Susan Fenton).

(source: Reuters)