Iraq’s oil production from its main southern fields has dropped by around 70% to about 1.3 million barrels per day (mmbbl/d) as the country struggles to export crude through the Strait of Hormuz amid the ongoing Iran war, three industry sources told Reuters.

Output from the fields had stood at roughly 4.3 mmbbl/d before the conflict erupted. An official at the state-run Basra Oil Company said crude storage had reached its maximum capacity, forcing authorities to slash production and directing the remaining output to domestic refineries.

The Strait of Hormuz is one of the world’s most important oil transit chokepoints, carrying about a fifth of global oil and liquefied natural gas flows.

Iraq’s crude exports have also plunged sharply, averaging around 800,000 barrels per day (bbl/d), according to the sources. Only two tankers were able to load as vessels were unable to move freely through the strait toward Iraq’s southern export terminals.

Shipping data showed that the tankers Cospearl Lake and Yuan Hua Hu each completed loading about 2 million barrels (mmbbl) of crude at around 8 p.m. local time (1700 GMT), with no new vessels arriving afterward, noting that oil flows from Iraq’s southern export terminals were effectively halted, according to oil officials and a shipping agent.

The steep decline in production and exports threatens to put additional strain on Iraq’s fragile finances, as the country depends on crude sales for nearly all public spending and more than 90% of its revenues.

A senior official at the Iraqi oil ministry warned that the situation represents the most serious operational threat to Iraq’s oil sector in more than two decades.