Original Source

Iraq has declared force majeure on all oil fields developed by foreign companies, halting most of its crude exports. This decision follows military operations that disrupted navigation through the Strait of Hormuz, causing international oil prices to soar.

Iraq Declares Force Majeure Due to Strait of Hormuz Disruptions

Iraq has declared force majeure on all oil fields developed by foreign oil companies after military operations in the region disrupted navigation through the Strait of Hormuz, effectively halting most of the country's crude exports. Force majeure is a legal clause that relieves a company from contractual obligations without penalty due to events beyond its control, such as natural disasters or acts of war.

The Iraqi Oil Ministry ordered a full shutdown of production at affected areas, with no compensation arising from the measure under contract terms. The ministry also invited companies to urgent talks to agree on essential operations, costs, and staffing under the force majeure conditions. This drop in production and exports is expected to strain Iraq's already fragile finances.

Impact on International Oil Prices and Middle East Geopolitics

International oil prices settled at their highest level in nearly four years on Friday, as the three-week-old US-Israeli war with Iran escalated. Iraq relies on crude sales for nearly all public spending and more than 90% of its income. Approximately 20% of global oil and liquefied natural gas supplies travel through the Strait of Hormuz, underscoring the critical importance of stability in the region for global energy markets.

*Source: YouTube: Reuters (2026-03-21)*

Related Articles