War Leaves Iraq’s Oil Hub Idle as Workers, Trucks Struggle

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Basra: Basra, Iraq's key oil hub, is facing serious interruption as the ongoing Middle East war disrupts oil exports via the Strait of Hormuz. Employees have faced decreased hours, compensation cuts, and layoffs, while fuel trucks sit idle near the city's oil plants.

Basra is critical to Iraq's economy, as crude oil exports account for about 90% of total foreign revenue. Prior to the battle, Iraq produced over 4 million barrels of crude per day and exported approximately 3.4 million barrels, the majority of which went through Hormuz.

The disturbance pushed Iraq to reduce output after storage facilities became overcrowded when exports through Hormuz were prohibited. Baghdad has looked to alternative routes, like as a pipeline to Turkey and transportation routes through Syria, although these can only handle a fraction of the volumes often supplied by sea. Iraq exported an average of 2.6 million barrels per day in September, according to officials.

Umm Qasr, Iraq's principal southern cargo port, is likewise experiencing a decline, with only a few vessels parked and three freshly completed berths unoccupied. Port workers have lost profit-related incentive payments, and Basra firms are reporting lower sales as imports grow more expensive and household incomes fall.

The economic burden has spread to Iraq's economics, with a government official claiming that foreign-currency reserves have decreased by $20 billion. Although oil exports via Hormuz increased slightly in September, Iraqi crude was sold at a discount, and the government has relied on domestic borrowing to pay salaries and satisfy financial obligations.