Iraq has requested operators of five major oil fields to increase production to prewar levels, with a target output surpassing 3 million barrels per day. This move follows a preliminary agreement between the United States and Iran aimed at fully reopening the Strait of Hormuz, a crucial conduit for global oil shipments. The deal is expected to alleviate previous disruptions that had significantly curtailed Iraq’s oil exports. The restoration of normal operations in the Strait could prompt increased oil supply from Iraq, which had been constrained due to the geopolitical tensions affecting tanker traffic.
Key Takeaways
Markets appear to interpret Iraq’s production boost as consistent with increased oil supply, potentially affecting global oil prices.
The preliminary US-Iran agreement to reopen the Strait of Hormuz suggests a significant easing of previous export restrictions.
Pricing suggests market participants view the likelihood of WTI Crude Oil hitting a low price in June 2026 as less probable.
