Iraq puts losses from US-Iran war at $60bn

Iraq has incurred an estimated $60 billion in losses from the US-Iran war, according to its foreign minister, as disruptions to oil exports strain the country’s finances.

The impact highlights Iraq’s vulnerability to upheavals in Gulf shipping, with oil providing most of the government’s revenue. Although export volumes have recovered, the public coffers face persistent pressure from discounted crude sales and uncertainty over access to international markets.

“Iraq has suffered losses of around $60 billion so far as a result of the conflict between the US and Iran. This conflict has created a severe energy crisis and increased risks of heightened inflation,” the minister, Fouad Hussein, said in Rome on Thursday.

Hussein gave no breakdown of the losses, but most of them occurred during the first few months after the war started on February 28.

Oil minister Bassim Khudair said last month that Iraq pumped only 200,000 barrels per day of oil in May, about 6 percent of its pre-war crude exports of nearly 3.4 million bpd. But he added that exports were exceeding 3 million bpd in September as high discounts drove more global companies to lift crude from Iraq’s southern ports.

“Although Iraq has resumed exporting oil at near pre-war levels, the situation remains uncertain and you cannot guarantee revenues will be sustainable as they were before the war,” Iraqi economist Nabil Al-Marsoomi said.

“The situation is affecting the country’s fiscal balance and this is forcing it to borrow more. It will also affect growth this year.”

The International Monetary Fund this week forecast Iraq to be one of the countries hit hardest by the regional conflict, with GDP projected to shrink 16 percent in 2026.

Further reading:

• Iraq reveals five-year plan to diversify economy
• World Bank commits $1bn to support Iraqi businesses
• Iraq posts $5bn budget gap as oil revenue slumps during Iran war