Iraq's economy is collapsing due to a near-total shutdown of its oil exports, plummeting from 3.4 million barrels per day to just 250,000 since the Iran war began. Storage tanks are at near-critical levels, and production has been slashed by nearly three quarters. This catastrophe strikes a country already vulnerable, with oil sales making up 90% of the state budget. The caretaker government, struggling with limited power and a spiralling conflict, faces an imminent budget crisis, with funds for public sector salaries expected to run out by May. Iraq has already lost $5.4bn, nearly 2% of its 2024 GDP, from the closure of the Strait of Hormuz, its vital shipping route.

Economists warn Iraq, one of the world's most oil-dependent nations, is uniquely exposed to this disruption.