BP (BP) has begun shutting down production at Iraq's Rumaila oil field as onshore storage reaches capacity and tanker traffic stalls in the Persian Gulf, Bloomberg reported Tuesday, citing an unnamed person familiar with the situation.

The massive oil field, which is managed by BP alongside PetroChina and the Iraqi government, is being idled as tankers struggle to exit the region and Iraq is prepared to cut up to 3 million barrels of daily output if the logistical bottlenecks persist, the person told Bloomberg.

BP didn't immediately reply to a request for comment from MT Newswires.

Front-month US West Texas Intermediate crude oil futures prices rose 8.2% to $77.08 per barrel on the New York Mercantile Exchange recently Tuesday, while global benchmark North Sea Brent crude oil gained 7.7% to $83.70 per barrel, after reports of the Strait of Hormuz closing in Iranian Media.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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