ERBIL, Kurdistan Region - Iraq’s monthly revenues have dropped to nearly half of its expenditures due to declining oil exports following the US-Iran war, an advisor to outgoing Prime Minister Mohammed Shia’ al-Sudani said on Monday, warning that Baghdad may need to resort to domestic or foreign borrowing to sustain public spending.
Monthly revenue has dropped to nearly four trillion dinars (over $3 billion), compared to the country’s financial obligations, which exceed eight trillion dinars per month (over $6.1 billion), Mudher Mohammed Salih, the premier’s financial adviser, told Rudaw, adding Iraq’s public finances are facing a “sensitive phase” as oil revenues continue to decline.
He noted that the spending mainly covers salaries and essential operational expenditures.
The decline in Iraqi oil revenues follows disruptions linked to the US-Israel war with Iran, which led to the closure of the Strait of Hormuz on February 28 - a key route for Iraqi crude exports. Although a ceasefire is currently in place, issues surrounding the movement of oil tankers through the strategic waterway persist.
Salih stressed that the situation currently represents "a temporary liquidity crisis rather than a deficit that threatens the state’s continued functionality,” but warned that prolonged pressure could affect Iraq’s economic stability.
For Iraq, before the six-week war, production stood at around 4.5 million barrels per day, with roughly 3.5 million barrels exported daily. Nearly 90 percent of those exports passed through the Strait of Hormuz.
However, exports fell to 18.6 million barrels in March, generating about $1.