Iraq has suffered losses of about $60 billion due to the war in the Middle East and the subsequent collapse in oil exports. This was stated by Foreign Minister Fuad Hussein to his Italian counterpart in Rome, quoted by AFP. “Iraq has suffered losses estimated at about $60 billion during the recent war between the United States and the Islamic Republic of Iran“, Hussein said.
According to his statement, the reason is the blockade of the Strait of Hormuz by Iran. The sea route, one of the world's main energy corridors, has carried most of Iraq's oil from the country's south.
Oil exports have collapsed
Before the conflict, Iraq, a member of the Organization of the Petroleum Exporting Countries, was producing about 4 million barrels a day and exporting about 3.5 million barrels. Limited access to the Strait of Hormuz, combined with insufficient storage capacity, has forced the country to suspend most of its production.
Baghdad has begun to use limited export alternatives. Some of the oil is trucked through Syria, while other quantities are sent to Turkey by pipeline. After a sharp decline, there has been a partial recovery. Iraq's oil ministry said exports reached 2.6 million barrels per day between September 1 and 21.
Pressure on reserves and dinar
Oil accounts for about 90% of Iraq's revenue, making the drop in exports a direct blow to state finances. Foreign exchange reserves have fallen by $20 billion, and consumer prices have risen sharply.
Iraq's central bank has devalued the dinar against the dollar for the first time in more than three years. Foreign currency from oil sales is used to finance imports, support the national currency, and pay public sector wages and pensions.
The government has said Iraq will seek to diversify its revenue sources. The goal is to increase the share of non-oil revenues from 10% to 45% by 2037.
Sources: bgnes.bg, nampa.org