Iran war leaves Iraq running out of money

The Strait of Hormuz, a crucial shipping route, is causing significant financial strain for many Iraqis due to its blockade. Mahmoud Waleed, a 38-year-old teacher, has noticed his salary arriving later and later as Iraq struggles to export enough oil through the blockaded strait. This delay has left thousands of Iraqis like Waleed anxiously reducing expenses and saving for emergencies.

Over 85% to 90% of Iraq's national budget comes from oil exports, and with the blockade, Iraqi oil exports decreased by 83% in March compared to the same period last year. Government sources revealed that Iraq's monthly income in May and June was between $2 billion and $2.3 billion, far less than needed. The Iraqi government has responded by denying rumors of 45-day salary payments and claiming there are $83 billion in reserves.

However, a recent report by Oxford Economics suggests that maritime traffic through the Strait of Hormuz is unlikely to return to normal soon, potentially lasting until 2028. Iraqi economist Ali Al-Rawi warns that the entire Iraqi economy is now dependent on oil revenues, making this crisis a serious one that transcends the oil sector.

Despite the government's attempts to address the issue, such as reviving an Iraq-Lebanon pipeline and seeking special dispensation from Iran, experts believe that more significant reforms are necessary to reduce corruption and encourage private sector growth, moving Iraq away from its oil dependency.