The Iraq Eco Observatory has released its oil sector report for the first half of 2026, revealing that regional conflict, geopolitical tensions, and the closure of the Strait of Hormuz led to a loss of over 302.8 million barrels of oil following a historic production collapse.

According to data compiled by the observatory, Iraq’s total crude production for the first six months of this year reached approximately 440.3 million barrels. 

However, escalated regional fighting and the strategic closure of the Strait of Hormuz inflicted severe disruptions, cutting projected baseline output by an estimated 302.8 million barrels.

Geopolitical Shocks Disrupt Monthly Baseline Rates

Analyzing the timeline of the disruption, the observatory noted that Iraqi oil production held steady through the beginning of the year. 

Output averaged above 4.1 million barrels per day (bpd) during January and February before regional hostilities directly impaired critical production facilities and primary export infrastructure from March through June.

First Half 2026 Daily Production Breakdown

The observatory’s monthly tracking highlights the steep decline and gradual stabilization of daily production rates:

• January: 4,120,000 bpd (Baseline stability)
• February: 4,140,000 bpd (Peak output)
• March: 1,906,000 bpd (Initial supply contraction)
• April: 1,633,000 bpd (Ongoing disruptions)
• May: 1,406,000 bpd (Historic lowest level)
• June: 1,525,000 bpd (Marginal recovery)

Cumulative Four-Month Losses

The Iraq Eco Observatory concluded that total volume losses across the four disrupted months culminated in roughly 302.8 million barrels. 

This deficit was evaluated against Iraq's standard operational baseline capacity of 4.1 million bpd.