Iraq has suffered losses of around $60 billion since the outbreak of the Middle East war, largely due to a sharp decline in oil revenues caused by disruptions to shipping through the Strait of Hormuz, Iraqi Foreign Minister Fuad Hussein said during a meeting with his Italian counterpart in Rome.
“Iraq has incurred losses estimated at around $60 billion during the recent war between the United States and Iran,” Hussein said.
Iraq has been facing an economic crisis since the war broke out in February, with its oil exports — which account for around 90% of government revenues — falling sharply for several months. The decline forced the government to resort to domestic borrowing, while consumer prices rose and foreign currency reserves fell by around $20 billion.
Before the war, Iraq, an OPEC member, produced around 4 million barrels of oil per day and exported approximately 3.5 million barrels, most of them from southern Iraq through the Strait of Hormuz.
Since the war began, Iran has restricted shipping through the vital waterway, a key route for global energy supplies. This forced Iraq to halt production at most of its oil fields after storage facilities reached capacity, while resorting to limited exports by tanker trucks through Syria and via pipeline through Turkey.
Following the sharp decline in Iraqi oil exports, shipments have recently recovered to around 2.6 million barrels per day between September 1 and 21, according to the Oil Ministry.
The International Monetary Fund said this week that Iraq is among the countries hardest hit by disruptions to transportation caused by the war.
As the economic crisis deepened, the Central Bank of Iraq last week raised the official dollar exchange rate for the first time in more than three years.
Iraq relies heavily on foreign currency generated from oil sales to finance imports, stabilize the dinar and pay the salaries of public-sector employees and retirees, who account for around 20% of the country’s population of more than 46 million.
Iraq is seeking to diversify its economy and increase non-oil revenues from 10% to 45% by 2037.
Source: AFP
