Shafaq News/ Experts in the oil field revealed the fate ofthe Iraqi economy in case the Israeli war in Gaza and Lebanon expands to therest of the region to include targeting oil facilities, as Iraqi income depends90% on oil, making the country “among the most affected” in the event ofescalation in the region.
The region where Iraq is located supplies more than 20% ofthe oil market's needs, and any emergency could ignite the oil market to levelsthat the global economy cannot withstand, resulting in a significant rise inthe price of goods and commodities required by other markets, according to theeconomic expert, Diaa Mohsen.
The Inconvenient Outweigh The Advantages
As for Iraq, Mohsen told Shafaq News, “There are bothpositive and negative aspects. As for the positive aspect, any increase in oilprices means an increase in oil revenues and this may result in a large surplusin the state's general budget.”
“The negative aspect, however, may overshadow the positiveone, because Iraq imports all its needs in foreign currency coming from thesale of Iraqi oil. This means that what comes in from one side goes out fromthe other, and this is certainly not in Iraq's interest,” Mohsen said.
“The danger may arise if the oil loading stations aresubjected to air strikes by the Zionist enemy, under the pretext of thepresence of Iraqi fighters fighting with Hezbollah and Hamas fighters. Thatwould greatly affect the Iraqi economy,” he explained.
In a post on Telegram, Abu Ali al-Askari, the Kata’ibHezbollah security official, said, “If the energy war begins, the world willlose 12 million barrels of oil per day, and as Kata'ib Hezbollah previouslysaid, “Either everyone enjoys the resources or everyone is deprived.”
These statements come amid great tension in the region,following the recent strikes in Lebanon, the assassination of HezbollahSecretary-General Hassan Nasrallah, and the recent Iranian missile attack onIsrael, in a major escalation that threatens to lead to a war affecting Iraqand several countries in the Middle East.
Security and geopolitical tensions are escalating to thepoint of threatening the oil fields in the region, which is considered one ofthe richest oil-producing areas in the world and supplies about 30% of theworld's oil.
Iraq is one of the largest exporters of oil, the secondlargest oil exporter in OPEC, and has the fifth largest reserves in the world,according to oil and energy expert Kovind Sherwani.
Serious Repercussions For Iraq
“If instability occurs in the Gulf region, it will affectthe oil supply from this region to Asian and European markets, creating acrisis that may raise oil prices above $100,” Sherwani told Shafaq News.
As for the effects, “all oil-exporting countries will beaffected and Iraq will be one of the most affected for several reasons, themost significant being that the only outlet for the oil export is in the Gulfregion, which has become highly vulnerable to the escalation of militaryoperations between Iran and its allies on the one hand and the Zionist entityon the other, and some irregular factions that have also threatened oilsources,” Sherwani said.
“Oil institutions, including fields, wells, pipelines,refining and isolation facilities, and export ports, will all be affected ifthey are exposed to any military or missile attacks of any kind, thus creatinggreat instability that affects all producing countries,” he explained.
“The other influencing factor for Iraq is the highdependence of the Iraqi economy on oil by more than 90%. Oil is the mainresource for the Iraqi budget and economy, and any external impact on thisresource will have serious repercussions on the budget, economy, and allprograms of the Iraqi state,” he said.
“Iraq had to work to activate other outlets away from areasof tension for exporting oil, such as reviving the northern export outletthrough the Ceyhan port, which has been suspended since March 2023. The lossescaused to the Iraqi economy by the suspension exceeded $16 billion,” heemphasized.
“As well as expediting other export outlets, for example,the Basra-Aqaba pipeline, which could have been another source of export, andperhaps also thinking about reviving the export through Syrian ports that wereoperational until the 1970s,” he added.
The Impact Of The War On Iraqi Oil
For his part, researcher and writer in economics and energy,Dr. Bilal Al-Khalifa, explained the impact of the war in Gaza and Lebanon onIraqi oil saying that “the factors affecting global demand and oil prices aremany, the most important of which are wars and conflicts that occur in oilproduction areas or areas where oil consumption is noticeable, such as Europe,China and America.”
“The ongoing war between the Zionist entity and Gaza andLebanon also had an impact on oil prices. Fears of expanding the circle ofconflict in the West Asia region has increased the oil prices by about twodollars,” Al-Khalifa told Shafaq News.
“These fears arose after the Houthis entered the war bytargeting ships, including oil tankers linked to the Zionist entity orcountries supporting it, such as America and Britain, and this made thosetankers use the Good Hope route instead of the Red Sea and the Suez Canal,which led to an increase in transportation fees,” he said.
“Fortunately for Iraq, most of its oil exports are to theeast, including India with about one million barrels per day, China with about800,000 barrels per day, as well as South Korea, and what is exported toAmerica and the West, which passes through the Suez Canal, is about 400,000barrels or less, and therefore it is not affected by this issue,” according toAl-Khalifa.
“As for the possibility of expanding the war, especiallyafter the Iranian strike on the Zionist entity and the possibility of theirresponse to that strike by bombing Iranian oil facilities and the participationof other countries in the conflict, such as America or others, according tothis scenario, expectations indicate that oil prices will soar, reaching 150dollars and at the very least, as the parties to the conflict may targetZionist oil tankers or their supporters or target export and production facilities,”he continued.
“The second scenario, which does not include hitting the oilfields, also worries consumers. That is due to the presence of tension in alarge oil production area whose production rates reach 12 million barrels perday. Therefore, prices are expected to rise in this case as well, but withinthe limits of 10-20 dollars. As for the third scenario, which is no Zionistresponse, it will keep oil prices stable around the current price,” Al-Khalifasaid.
“In any case, Iraq's public revenues will increase because90% of its public revenues come from oil, and the large budget deficit of 64trillion dinars may decrease,” Al-Khalifa concluded.
Bassem Gharibawi, a member of the Oil and Gas Committee inthe Iraqi Parliament Council, ruled out any strikes targeting oil, explainingto Shafaq News that there are “interests that the United States and Europe seekto preserve, including the issue of energy and the need to keep energy supplyflowing because they need it. Any disruption in the export of Iraqi oil willreflect on them, so it will be preserved.”