Iraq discovers massive oil field as global energy tensions surge
Oil extraction (Photo: Getty Images)
Iraq has announced the discovery of a giant oil field, and these reserves were found in the southern province of Najaf. The area of the field on the border with the United Arab Emirates exceeds 8,700 square kilometers, according to Euronews.
Just one exploration block contains over 8.8 billion barrels of crude. This is one of the most important discoveries in recent years. During drilling at the Shams-11 well, specialists found light oil. Its initial flow rate was 3,248 barrels per day.
China's bet on the Iraqi desert
Iraq's main partner in the extraction project has become the Chinese company ZhenHua Oil. Its subsidiary Qurnain Petroleum Limited is already conducting seismic studies. The parties have discussed accelerating extraction, and investors have submitted a rapid development plan.
Iraq's Oil Minister Hayan Abdul Ghani also met with representatives of the PRC. Baghdad now seeks to obtain the first profitable oil in the shortest possible time.
Ormuz crisis and falling revenues
Rapid implementation of the extraction plan is very important for Iraq, because the war in the Middle East has paralyzed the country's exports. Previously, Iraq produced 4.5 million barrels per day. The country ranked third in production volume within OPEC, but now the situation has changed due to the blockade of the Strait of Hormuz.
The numbers indicate a deep crisis:
- In March, exports fell to 18.6 million barrels;
- Revenue was only $1.96 billion;
- The drop in revenue reached a critical 71% compared to February;
- In February, earnings were $6.81 billion.
Baghdad's new logistics strategy
Iraq is accelerating the construction of a strategic oil pipeline to the border with Syria. The export capacity of the new pipeline will be 2.5 million barrels per day. This will help reduce dependence on sea routes.
Overall, Iraq has the fifth-largest proven reserves in the world — 145 billion barrels of oil. The country controls about 9% of the world's resources.
What is the current situation on the oil market
After the mutual shelling of US and Iranian fleets, world oil prices continued to rise. The market does not trust the fragile ceasefire, which could end at any moment.
Meanwhile, according to Reuters, the UAE is secretly transporting oil through the Strait of Hormuz. Ships turn off tracking systems and run a high risk of being attacked by the Iranians.
RBC-Ukraine also reported that Iran has declared safe passage through the Strait of Hormuz. Tehran announced that this was achieved thanks to new procedures, but did not provide further details.
