Iraqi Ministry of Oil has announced the discovery of a major oil field in the southern Najaf province near the Saudi Arabia border (Iraqi Oil Ministry statement, 07/05/2026). The field, identified by China-based Zhenhua Oil, holds estimated reserves of 8.83 Gbl and a daily output of 3.2 kb/d of light crude oil. The Chinese firm secured exploration and development rights during the 2024 licensing round. This find aligns with Iraq's goal to boost oil production capacity to 6 mb/d by 2029.
Iraq currently faces challenges to its oil exports due to the Middle East war and disruptions in the Strait of Hormuz, a critical route for Iraqi energy shipments to global markets.
Iraq was among the first OPEC producers to reduce output after the war began, with production dropping from around 4.3 mb/d to approximately 1.2 mb/d (as of March 2026). Crude oil sales represent 90% of Iraq's budget revenues, making these disruptions highly detrimental to national finances.
To diversify crude export routes, the government is accelerating a strategic pipeline project connecting Basra province in the south to Haditha in Anbar province near the Syrian border, designed for an export capacity of 2.25 mb/d (KEI, 10/04/2026).
Additionally, in March 2026, the government resumed oil exports from the Kirkuk fields through the Turkish port of Ceyhan at a rate of 250 kb/d, following an agreement between the Iraqi federal government and Iraq's northern semi-autonomous Kurdistan Regional Government to restart flows (KEI, 19/03/2026).
The country has significant resources; proven crude oil reserves were reassessed by the Government in 2017 and estimated at about 20 Gt. These rank as the third largest worldwide (fifth when including unconventional reserves, which comprise 16% of proven reserves in the Middle East and 8% of global reserves as of end 2024), primarily located in the east of the country (Enerdata Global Energy Research).