No oil, no salary: Iraqi state employees are feeling the crunch of the Hormuz blockade

The Strait of Hormuz blockade, initiated by Iran following the Israeli and US bombing of Iran in February, is causing significant financial strain for ordinary Iraqis. Mahmoud Waleed, a 38-year-old teacher, has noticed his salary arriving later and later due to Iraq's inability to export enough oil through the Strait. The delay in salary payments has led to financial stress for many, who must now cut expenses and save for emergencies.

Ahmed, a doctor from Mosul, reported his salary was delayed by over 10 days this month. Iraq's national budget relies heavily on oil exports, with 85% to 90% of the budget coming from this source. With oil exports down 83% in March and 97% in May compared to the same periods in 2020, the government's income has plummeted to between $2 billion and $2.3 billion monthly.

Government officials have reassured that salaries will be paid for the next 10 to 11 months, citing reserves and other income sources. However, experts warn that Iran's blockade, which may persist until at least 2028, could lead to a prolonged crisis affecting Iraq's economy beyond the oil sector.