Iraq oil output collapses to 1.39M bpd amid US-Iran conflict
Iraq's crude oil production has significantly dropped to 1.39 million barrels per day due to the ongoing U.S.-Iran conflict. This decline represents one of the largest supply disruptions in recent history, with Iraq exploring alternative export routes. Market reactions indicate a complex interplay between supply shocks and demand concerns, affecting pricing expectations.
- ▪Iraq's crude production averaged 1.389 million barrels per day in April 2026, down from over 4.1 million bpd before the conflict.
- ▪The reported loss of approximately 2.7 million bpd is one of the largest single-country supply disruptions in recent decades.
- ▪OPEC Secretary General and Saudi Energy Minister's statements could influence market expectations regarding oil prices.
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## Market Snapshot The crude oil all-time-high market (September 30 deadline) is priced at 26.5% YES, up from 24% a day ago but down from 36% seven days ago. The December 31 contract sits at 34.5% YES, while the June 30 contract prices at 7.5% YES. ## Key Takeaways – Pricing appears consistent with YES outcome support across longer-dated contracts, suggesting markets view a near-term all-time high as unlikely but a medium-term supply shock catalyst as plausible. – The steep term structure — June 30 at 8% rising to September 30 at 26% — suggests participants view a potential catalyst window opening in Q3 2026. – Recent Brent crude weakness (reported at -4.4% to ~$99/barrel on May 24) appears to temper shorter-dated YES pricing despite the scale of Iraq’s reported output loss.
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