The fact that Iraq continues to import certain petroleum products, despite rising crude oil output and expanded refining capacity through the construction of new refineries, has raised questions about its ability to achieve sustainable self-sufficiency.
Long queues at gas stations during the past summer have once again highlighted the challenges of ensuring adequate supplies of petroleum derivatives for the local market, particularly during periods of high consumption.
In a study published by the Al-Bayan Center for Planning and Studies in Baghdad, Thamir Al-Ghadhban, Iraq's former Deputy Prime Minister and Oil Minister, examined the reasons why the suspension of gasoline imports could not be sustained, despite government announcements that the country had achieved self-sufficiency in key petroleum products.
On November 4, 2025, Prime Minister Mohammed Shia al-Sudani announced that Iraq had achieved self-sufficiency in major petroleum products, describing it as an important step toward energy independence.
He subsequently directed the government to halt imports of gasoline, diesel, and kerosene while exporting any surpluses, citing domestic production levels that exceeded demand. In a separate announcement, al-Sudani also projected that Iraq would begin importing liquefied natural gas (LNG) by 2028.
However, according to Al-Ghadhban, the decision to stop importing gasoline proved difficult to maintain due to a number of operational factors that did not receive sufficient attention when the policy was adopted.
The first factor relates to gasoline blending requirements. A significant portion of imported gasoline had been used to blend with locally produced fuel, particularly at the Baiji refinery, in order to achieve the required octane ratings. As a result, the availability of domestically produced gasoline does not necessarily eliminate the need for imported volumes used in blending operations.
The second factor concerns seasonal fluctuations in demand. The surplus on which the import ban was based appeared in November, a month when gasoline consumption typically declines. Al-Ghadhban notes that this seasonal pattern has been well known in Iraq for decades, including during the 1990s.
A third factor involves the management of strategic inventories. For years, the Ministry of Oil has followed a practice of building reserves of gasoline and diesel during the autumn and winter, when seasonal surpluses are available. Conversely, reserves of kerosene and liquefied petroleum gas (LPG) are accumulated during the summer, when demand for those products weakens.
By halting gasoline imports, Iraq was forced to draw down its stockpiles to meet rising demand, which eventually contributed to acute shortages during the summer. According to Al-Ghadhban, this experience demonstrates that a surplus recorded during a specific period is not, by itself, sufficient to guarantee supply availability throughout the rest of the year.
In addition to operational and seasonal factors, smuggling and leakage of petroleum products from the domestic market reduced the amount of fuel available to consumers. Al-Ghadhban identifies two channels: an internal one, involving the movement of products to the Kurdistan Region due to significant differences in retail prices, and an external one, involving exports to neighboring countries, also driven by price disparities.
Supply forecasts were further complicated by delays in commissioning the fluid catalytic cracking unit at the Basra refinery, which is expected to produce approximately five million liters per day of high-octane gasoline. According to Al-Ghadhban, the unit had been undergoing trial operations but had not entered service after the contractor left in the wake of regional conflict.
Al-Ghadhban concludes that these combined factors indicate Iraq had not yet achieved sustainable self-sufficiency in key petroleum products. In his view, self-sufficiency should not be judged by a temporary production surplus, but rather by the continuous ability to meet demand, supported by sufficient refining capacity, appropriate gasoline blending components, strategic reserves, and effective measures to curb product leakage from the domestic market.
Regarding liquefied natural gas, Al-Ghadhban believes Iraq will face significant difficulty in beginning LNG imports by 2028. He points out that Iraq has historically flared vast quantities of natural gas due to inadequate equipment for capturing and utilizing it, making it one of the world's largest gas-flaring countries. However, he expects flaring rates to decline as ongoing gas-capture and utilization projects come online.
These challenges place Iraq's energy sector at a crossroads. The country must ensure year-round availability of refined petroleum products while simultaneously expanding its ability to utilize associated gas, reduce flaring, and prepare to secure additional gas supplies through imports if necessary.
