The brief but intense 12-day conflict between Iran and Israel produced a mixed economic outcome for Iraq, according to Mudhhir Mohammed Saleh, financial and economic adviser to the Iraqi government. While the country benefited from a short-term surge in oil prices—up by 6 to 7 percent per barrel—this gain was offset by equally significant losses. Saleh estimated that Iraq earned an additional $150 to $160 million in oil revenues during the conflict, assuming a daily export rate of 3.3 million barrels, with exports continuing smoothly despite regional tensions.
However, these gains came at a cost. Iraq faced a spike in import and shipping costs due to rising maritime insurance premiums, global market volatility, and delays in supply chains. The conflict also disrupted air travel, reduced religious tourism revenues, and eliminated potential income from overflight fees. Saleh emphasized that these indirect losses matched the oil windfall, placing Iraq in a position of economic neutrality—neither profiting significantly nor suffering a major loss.
Saleh warned that short-lived financial boosts from geopolitical crises are unreliable for long-term economic planning. He called for the establishment of a sovereign emergency fund to cushion future shocks and recommended developing at least four independent oil export routes. Such measures, he argued, are critical to reducing Iraq’s economic vulnerability and ensuring financial stability in an increasingly volatile region.
