Economist Dhargham Muhammad Ali al-Haidari says Iraq has very few options left to deal with the current financial pressure, warning that the situation could become much more serious if problems in the Strait of Hormuz continue for a long time.
Speaking about the crisis, Al-Haidari said the government’s most realistic option right now is internal borrowing because its financial resources are limited and there are no strong alternatives available.
He explained that Iraq needs to make the most of other oil export routes to reduce its dependence on the Strait of Hormuz. This includes using oil tankers, exporting through Syrian and Jordanian ports, and continuing shipments through the Turkish Ceyhan pipeline. However, he pointed out that all of these routes together can handle less than a quarter of the oil that normally passes through the Strait of Hormuz.
Al-Haidari also said the growing tensions in the Strait of Hormuz are making it difficult to predict Iraq’s oil income for the current month. Because oil revenues are the country’s main source of income, any disruption could put serious pressure on government finances.
He warned that unless quick alternative solutions are found, Iraq could face a major financial crisis in the near future.
