MediumVI Energy Politics & Supply Security16 October 2026, Friday

Iraq puts the cost of the war at 60 billion dollars

Iraqi Foreign Minister Fuad Hussein told his Italian counterpart Antonio Tajani in Rome on 15 October that the country had lost about 60 billion dollars in the war. The ministry published the statement on 16 October; the main item is oil exports that depend on the Strait of Hormuz.

Location: BAGHDAD

According to Arab News, before the war Iraq produced about 4 million barrels a day and exported 3.5 million, most of it leaving the south through Hormuz. With too little storage capacity, the country shut in most of its output. It fell back on limited exports by lorry to Syria and by pipeline to Türkiye. The Oil Ministry says exports recovered to 2.6 million barrels a day over 1–21 September. According to 964media, ministry data show exports fell from more than 99 million barrels in February to 18.6 million in March. Monthly revenue dropped from 6.8 billion dollars to about 1.95 billion dollars.

The revenue shock has fed into the external balance. Arab News says foreign exchange reserves have shrunk by 20 billion dollars, and the Central Bank of Iraq devalued the dinar against the dollar for the first time in more than 3 years. Oil provides about 90% of state revenue, and public salaries are paid from that currency. In September Prime Minister Ali al-Zaidi had also put the loss in oil revenue alone at about 60 billion dollars. Sources report the figure sometimes as total economic loss and sometimes as lost oil revenue. The 60 billion dollars is the government's own estimate and could not be independently verified.

Talay assessment

Bottom line

Iraq shows the price paid by a Gulf producer without enough outlets to bypass Hormuz. Exports have fallen from 3.5 million to 2.6 million barrels a day and reserves have shrunk by 20 billion dollars. Because oil provides about 90% of revenue, the loss passes straight into salaries, the currency and the budget. While the strait stays conditionally open, Iraq's dependence on its Turkish and Syrian outlets grows.

Likely effects

Iraqi public financesNegative1–6 months
The 20 billion dollar drop in reserves and the dinar devaluation add pressure on public salaries paid from oil revenue and on imports.
Global supplyNegativeWeeks
The gap between pre-war exports of 3.5 million barrels and 2.6 million barrels shows Gulf supply losses persisting in a tight crude market.
TürkiyePositive1–6 months
Iraq's reliance on the pipeline to Türkiye raises the importance of flows via Ceyhan and of transit revenue; the line keeps its value as Baghdad's backup outlet.

Possibilities, ranked

1
Limited recovery continues60%
Exports stay in a 2.5–3 million barrels a day band, and Baghdad manages the gap by drawing on reserves and adjusting the exchange rate.
Watch: The Iraqi Oil Ministry's export data for October
2
Fiscal squeeze deepens25%
Hormuz flows deteriorate, exports fall again, salary payments are delayed and a new devaluation follows.
Watch: Official exchange rate and reserve statements from the Central Bank of Iraq
3
Rapid rebound15%
An interim arrangement is reached in the strait, and southern exports approach the pre-war level of 3.3–3.5 million barrels.
Watch: Weekly tanker loadings at the Basra terminals

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Iraq's war loss (government)▼ ~$60bn
Iraqi exports (1–21 September)▼ 2.6 mn b/d