BAGHDAD, IRAQ — The ongoing crisis in the Strait of Hormuz is increasingly affecting ordinary Iraqis, as the government faces falling revenues due to declining oil exports.
For several months, government employees have been receiving their salaries late. Mahmoud Waleed, a teacher from Mosul, said the delays have increased anxiety and forced many families to cut spending.
“The delay affects you a lot. We have financial obligations as well as basic living expenses. It makes you really anxious and fearful.”
About 85 to 90 percent of Iraq’s budget revenues come from oil, with a large share of its exports passing through the Strait of Hormuz.
Disruptions to shipping have sharply reduced Iraq’s oil exports and government revenues. The government needs between $6.5 billion and $8.2 billion every month to pay salaries, pensions and social benefits.
The situation has already triggered small protests by university workers and employees at the Ministry of Electricity.
Experts warn the crisis could worsen if salary delays continue alongside rising prices, electricity shortages and deteriorating public services.
“The entirety of the Iraqi economy is now hostage to oil revenues,” economist Ali Al-Rawi said.
The Iraqi government is seeking alternative routes to export oil through Turkey and Syria while also considering reforms to reduce the country’s heavy dependence on oil revenues.
For now, the government’s biggest challenge is to keep paying public-sector workers while finding a longer-term solution to Iraq’s dependence on oil.
