Iraq’s economy is increasingly exposed to geopolitical shocks and structural deficiencies, economist Nabil Al-Marsoumi warned, as the region reels from the aftermath of the 12-day Iran-Israel war. Al-Marsoumi, a professor at Basra University, highlighted a 60% surge in insurance premiums for Gulf oil tankers and a staggering 195% rise in transport costs to Asia, underscoring the fragility of Iraq’s export-dependent economy. He stressed that any prolonged regional conflict threatening the Strait of Hormuz could cripple Iraq’s oil exports, especially with the Ceyhan pipeline to Turkey still offline since March 2023.
Turning to domestic challenges, Al-Marsoumi pointed out that oil flows from the Kurdistan Region—averaging 400,000 barrels per day—are not critical to federal revenue but spotlight deeper fiscal dysfunctions. He criticized the Kurdistan Regional Government’s (KRG) decision to cover public salaries by reducing employee allowances by 30%, calling it a symptom of the unresolved political rift with Baghdad. Without a unified oil revenue-sharing mechanism, he warned, salary delays and fiscal instability will persist.
The economist also criticized Iraq’s broader investment climate, describing it as inhospitable due to systemic corruption, weak legal frameworks, and armed group interference. He cast doubt on official claims of $90 billion in foreign investment, citing a lack of supporting data in Iraq’s balance of payments. Furthermore, Iraq’s continued reliance on imported fuel—despite being the world’s second-largest oil producer—was labeled a “policy contradiction,” with Al-Marsoumi calling for urgent structural reforms, diversification efforts, and activation of alternative export routes via Turkey, Syria, and Jordan.
