Iraq's oil exports are under growing pressure as tensions persist in the Strait of Hormuz, with shipments still well below pre-war levels.
The Strait of Hormuz serves as the lifeline for Iraqi oil exports. While Iraqi oil exports have recently climbed to around two million barrels per day, they remain well below the pre-war level of roughly 3.4 million barrels per day.
Iraq's economy relies heavily on crude oil exports, which account for about 90 per cent of the country's revenues. So the current reduction is putting the economy under severe strain.
"We want safe passage, and we want insurance companies to underwrite Iraqi shipments again. Currently, Iraqi oil is selling on global markets at an average of about 25 US dollars a barrel, less than the global market prices. Iraq is bearing the brunt of these losses, and that's putting pressure on budget financing and on our ability to sustain spending as mandated by law. The country needs around 7 billion to 8 billion US dollars a month just to keep up with expenditures. Currently, the central bank is the safe haven for fiscal policy, but not indefinitely," said Safwan Qusay, professor of economics at Al-Mustansiriya University.
Majash Al-Tamimi, a political affairs researcher, pointed to the logistical and diplomatic bottlenecks that have forced Iraq to slash exports.
"I believe coordination with the American and Iranian sides is ongoing. The prime minister traveled to Iran and made requests, but so far there have been no approvals. The problem is that Iraq doesn't own its own tankers. It sells its oil at the port, so the vessels belong to other companies. Iraq isn't obligated to insure them, but those companies need substantial coverage, and that uncertainty has forced Iraq to significantly cut its exports," said Majash Al-Tamimi.