Iraq's Oil Production Recovery Could Take Four Months Following Regional Conflict

Iraq and other regional oil producers may require approximately four months to restore production to 80% of February 2026 levels following war-related disruptions, according to S&P Global. Iraq previously reduced output during early conflict stages due to export challenges and storage constraints. The recovery process is expected to be gradual, as most regional fields rely on complex water and gas injection systems to maintain reservoir pressure. Extended shutdowns are complicating the reactivation of these sites, with a full recovery likely exceeding the four-month window. Production costs are projected to rise by 4% to 6% in the event of a short-term conflict, potentially increasing to 15% if hostilities are prolonged. Continued regional tensions could further suppress energy sector investments and merger and acquisition activities through 2026.