Oil Ministry slashes upstream spending for 2026
Urgent austerity plan aims to cut $1.4 billion from oil field budgets nationwide in 2026 without affecting production — a warning sign of fiscal trouble for Iraq.
Oil Minister Hayyan Abdulghani (center left) and Deputy Oil Minister for Upstream Bassim Mohammed Khdair (center right) meet with Zaid Elyaseri (far left), the president of BP Iraq, in Baghdad on Jan. 26, 2026, to discuss the company's upstream plans and project expenses. (Photo credit: Oil Ministry)
BASRA - Iraq’s oil sector is grappling with urgent Oil Ministry directives to cut costs by $1.4 billion in 2026, in an apparent sign that Baghdad is beginning to reckon with a potential fiscal crisis driven by persistently low oil prices.
The ministry's austerity drive is forcing state oil companies to find quick and substantial savings in 2026 field budgets that had already been approved in late 2025, including at fields operated by international oil companies (IOCs), according to multiple state oil company officials and written Oil Ministry directives obtained by Iraq Oil Report.
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