Kurdistan Region's Oil Industry Hit Hard by Regional Conflict
The Kurdistan Region's oil industry was severely impacted by regional conflict during the US-Iran war in 2026. The region's oil production fell by more than 70% after the war began, with production dropping from around 300,000 barrels per day to just 50-60 thousand barrels per day.
The decline was largely due to concerns over drone and missile attacks on energy facilities, as well as disruptions to export routes. Many oil companies operating in the region suspended activities, including Gulf Keystone's operations at the Sheikhan field, which fell from around 44,100 barrels per day in 2025 to just 14,600 barrels per day in 2026.
The impact on the region's electricity sector was also significant, with the Kormor gas field, a major source of power, being shut down twice during the war. The continued security threats and unresolved financial and political disputes between Erbil, Baghdad, and international oil companies have left the recovery process fragile.
Despite recent increases in production and exports, experts warn that security guarantees, reliable payments, and a stable agreement are needed for the sector to recover sustainably. The region's Interior Minister has stated that some oil fields remain closed due to lack of security guarantees and air defense.