Iraq says lost USD60bn as Mideast war hits oil exports

Iraq has incurred an estimated loss of $60 billion due to the ongoing Middle East conflict, according to Foreign Minister Fuad Hussein. Iran has imposed a blockade on a critical waterway, the Strait of Hormuz, which significantly impacts global energy exports. Iraq, a member of OPEC, was previously producing around 4 million barrels of oil daily, exporting approximately 3.5 million barrels, primarily via the Strait of Hormuz.

However, the Iranian blockade forced Iraq to halt most production and resort to limited exports through Syria and Turkey by road and pipeline. Foreign Minister Hussein informed his Italian counterpart in Rome that Iraq has suffered these substantial losses as a result of the recent war between the United States and Iran. Although Iraqi oil exports have slightly rebounded to 2.6 million barrels per day between September 1 and 21, foreign currency reserves have dropped by 20 billion dollars, and consumer prices have surged, plunging Iraq into an economic crisis.

In response, the Central Bank of Iraq devalued the dinar against the dollar for the first time in over three years. Iraq heavily depends on oil exports to generate foreign currency for imports, stabilize the dinar, and pay salaries to public sector employees and retirees. Authorities aim to diversify Iraq's economic resources and increase non-oil revenues from the current 10 percent to 45 percent by 2037.