India, March 3 -- Iraq has more than halved production at the world's second largest oilfield after the Islamic Revolutionary Guard Corps declared the Strait of Hormuz closed amid an escalating Iran war.

Rumaila, a 1.2 million-bpd oilfield operated by the state-owned Basra Oil Co., has cut production by 700,000 bpd due to overloaded storage, Reuters reported on Tuesday, citing Iraqi officials. That, after a chocked Strait of Hormuz has slowed the arrival of tankers for crude oil exports. Production at the West Qurna 2 oilfield has also been cut, by 460,000 bpd.

Iraq will be forced to cut its oil production by more than 3 million barrels per day in a few days if oil tankers cannot move freely through the Strait of Hormuz and reach its lo...