Iraq delays July public salaries as Strait of Hormuz blockade guts oil revenue

Lead

Iraq's public employees are facing delayed July salaries as the country grapples with a severe oil export crisis triggered by the continued closure of the Strait of Hormuz, according to Arab media reports. The financial strain has been building for months, with oil exports plunging from 100 million barrels in February to around 32 million in May and June, as reported by The National, citing figures from Iraq's Oil Ministry.

Iraq spends approximately $6.5 billion a month on public sector salaries, pensions, and social welfare payments, according to the Finance Ministry. A senior ministry official told The National that if the export disruption continues, the government will not be able to pay salaries on time. "We will pay whenever we have cash. Or those who got paid in time for July will be paid late for August," the official said, adding that plans were being considered to extend the payment cycle to every 45 days.

Coverage Comparison

The Jerusalem Post, in multiple reports by Danielle Greyman-Kennard, highlighted the gravity of the situation, noting that Iraq's economy remains heavily dependent on oil, which accounts for 90% of government revenue, 95% of export earnings, and more than 53% of the country's gross domestic product. The reports also cited experts and officials to underscore the impact of the crisis on public employees and the broader economy.

One report quoted Dr. Ronen Zeidel, a researcher at the Moshe Dayan Center, who warned that the relatively small protests that have broken out in Iraq over the unpaid salaries—tempered so far by the focus on the Ziyarat al-Arbaeen Shia pilgrimage—could turn violent if the delays continue. "When you don't export your oil, and oil is the main product of the Iraqi economy, you don't have money," Zeidel said.

The coverage also noted that poverty in Iraq had fallen from 23% to 17.5% over the past three years, according to the Multidimensional Poverty Index, but the Borgen Project warned in April that the continued closure of the Strait of Hormuz could jeopardize that progress.

Key Claims

• Iraq spends approximately $6.5 billion a month on public sector salaries, pensions, and social welfare payments, according to the Finance Ministry.
• Oil exports plunged from 100 million barrels in February to around 32 million in May and June, according to figures from Iraq's Oil Ministry as reported by The National.
• Iran has targeted vessels carrying fuel cargoes from Iraq despite promising an exemption for Iraqi vessels transiting the strait, as reported by Al Jazeera. In mid-March, Iranian drone boats entered Iraqi waters and attacked the Marshall Islands-flagged Safesea Vishnu and the Malta-flagged Zefyros, according to the Jerusalem Post.
• Oil accounts for 90% of government revenue, 95% of export earnings, and more than 53% of GDP, as reported by the Jerusalem Post.
• The US controls revenues from Iraq's oil fields through the Development Fund for Iraq (DFI) held in New York, according to a Jerusalem Post report. The report also claimed that Iraq has been used for laundering dollars and transferring them to Iran, and that Iraqi banking and financial systems are not operating according to American regulations, leading to delays in dollar releases.