<span>STORY: Iraq declared force majeure on all oil fields developed by foreign oil companies, according to three energy officials with direct knowledge of the decision.</span><span>This comes after military operations in the region disrupted transportation in the Strait of Hormuz, halting most of the country’s crude oil exports.</span><span>Approximately 20% of the global oil and liquefied natural gas supply passes through the strait.</span><span>‘Force majeure’ is used to describe events beyond a company’s control, such as a natural disaster, and often relieves the company from contractual obligations without penalty.</span><span>Iraq’s oil ministry ordered a complete halt to production in the affected areas, without any compensation resulting from the measure under contract terms, according to a March 17 letter seen by Reuters.</span><span>International oil prices reached their highest level in nearly four years on Friday as the US-Israeli war with Iran, which has been going on for three weeks, escalated.</span><span>The ministry said it would periodically review the situation and invited companies to hold urgent talks to reach agreement on necessary operations, costs and personnel under force majeure conditions.</span><span>The decline in production and exports will strain Iraq’s already fragile financial situation, as the state depends on crude oil sales for almost all public spending and more than 90% of its income.</span>
