ERBIL, Kurdistan Region - Iraq has suffered an estimated $60 billion in losses during the war between the United States and Iran, Foreign Minister Fuad Hussein said on Thursday, warning of the exacerbating effect of the global energy crisis amid rising concerns about inflation.
Hussein gave the estimate during a meeting with Italian Deputy Prime Minister and Foreign Minister Antonio Tajani in Rome, according to a statement from Iraq’s Foreign Ministry carried by the state-run Iraqi News Agency (INA).
"Iraq has incurred losses estimated at approximately $60 billion during the recent conflict between the United States and the Islamic Republic of Iran," the statement read, warning that "the continuation of the conflict has contributed to exacerbating the global energy crisis and heightened concerns over rising inflation rates, which negatively impacts the economies of many nations worldwide, including those in Europe."
The ministry did not provide a breakdown of the losses or explain how the figure was calculated.
Iraq’s oil exports served as a major source of government revenue and fell sharply for several months after shipping through the Strait of Hormuz was disrupted, forcing the government to seek alternative export routes.
The US and Israel in late February launched an aerial campaign against Iran, striking thousands of targets across Iran over six weeks.
Tehran responded with thousands of drone and missile strikes across the Middle East, targeting alleged US assets - particularly in Gulf Arab states - while also launching retaliatory strikes against Israel.
Despite the Memorandum of Understanding (MoU) signed in mid-June, Iran and the US have traded multiple rounds of strikes and counterstrikes as a US-blockade on the Strait of Hormuz remains in effect since mid-July.
Before the war, Iraq - the second-largest crude oil producer in OPEC - exported around 3.4 million barrels per day, around 95 percent of which transited through the Strait of Hormuz.
Iraq’s crude exports fell from more than 99 million barrels in February to around 18.6 million barrels in March, according to oil ministry data. The most recent data shows exports having recovered to around 73.68 million barrels by the end of August, but remain below pre-war levels. The disruption has sharply reduced oil revenues and increased Iraq’s fiscal shortfall.
Oil sales provide much of the foreign currency the country needs to pay public-sector salaries, finance imports and support the value of the Iraqi dinar. Iraq’s dependence on oil revenue leaves its public finances vulnerable to interruptions in exports, which previously accounted for 90 percent of state revenues.
In an efforts to ease financial requirements of the state budget amid difficult economic and financial conditions, Iraq’s Central Bank (CBI) earlier in October implemented new exchange rates for the Iraqi dinar following a cabinet decision the previous day to devalue the currency, raising the official end-user rate from 1,320 dinars per US dollar to 1,520.
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