Oil fields in Erbil and Duhok provinces were targeted by explosive-laden drones over two days last week. The attacks on various areas of these two provinces continue, and the number is increasing day by day, despite condemnations from the United States, Iraq, and demands from the Kurdistan Region to stop the attacks.
Currently, two-thirds of oil production in the Kurdistan Region has been halted, and companies and the Kurdistan Regional Government’s (KRG) natural resources ministry indicate massive damage to oil production infrastructure in the Region. This has had a direct impact on the market, with each ton of oil products becoming approximately $30-40 more expensive. If the current situation continues, prices will rise even higher.
Furthermore, total oil production in the Kurdistan Region has declined to 101,680 barrels per day, which is the lowest level of oil production in the Kurdistan Region oil fields since the second quarter of 2015.
Before the drone strikes, oil production from 12 oil and gas fields in the Kurdistan Region was 328,000 barrels, including 15,819 barrels of Khor Mor condensate gas. Currently, oil production - excluding gas - has reached 101,680 barrels.
These attacks have a very significant impact on the oil and gas sector in the Kurdistan Region, as they come at a time when, since March 2023, all development and new investments by international oil companies (IOCs) in the Kurdistan Region have stopped. Now these attacks have targeted the existing infrastructure of companies and caused reduced production and zero operations by IOCs in Erbil and Duhok. If the Khurmala oil field facilities are again targeted by drones, production levels will certainly reach near zero throughout the Kurdistan Region.
The motives behind these attacks are complex and varied. Primarily, they have targeted the oil industry infrastructure of the Kurdistan Region, demonstrating the high technical capability of the attackers and their ability to strike anywhere and anytime, regardless of the consequences.
Another point is that oil and gas fields in the Kurdistan Region still lack adequate protection systems, which is why the impact of these attacks has caused major economic consequences and significant damage to the industry. Even the Shekhan oil field, operated by the British company Gulf Keystone, decided to halt oil production due to security risks, though it has not yet been targeted.
The 70 percent reduction in oil production not only harms oil companies and the Kurdistan Region’s revenues from this sector, but also will directly impact oil refineries and prices of oil products, especially gasoline, in the coming days if a solution is not found quickly.
Currently, except for Khurmala and Sarqala oil fields, oil production has been halted in all other oil fields in the Kurdistan Region, and it is unclear when companies will resume oil production.
Mahmood Baban is a research fellow at the Rudaw Research Center.
The views expressed in this article are those of the authors and do not necessarily reflect the position of Rudaw.
