Iraq faces economic blow if Iran shuts Strait of Hormuz
Baghdad (IraqiNews.com) – The Strait of Hormuz, a narrow but critical waterway linking the Arabian Gulf to the global energy market, is once again under threat amid heightened regional tensions.
Should Iran follow through on threats to shut the strait, the repercussions for Iraq would be immediate and severe.
Iraq relies heavily on the Strait of Hormuz for both imports and exports. Its primary seaport, Umm Qasr in Basra, depends on maritime routes that pass through the strait. A closure would paralyze the flow of essential goods, food supplies, industrial equipment, and consumer products into Iraq, triggering shortages and price spikes across the country.
Even more significantly, Iraq's oil exports—nearly 3.3 million barrels per day—are shipped from ports in southern Iraq via the Hormuz corridor. Blocking the strait would halt these shipments, slashing government revenues, destabilizing global oil markets, and potentially triggering a severe economic crisis for Baghdad.
As the world's second-largest oil producer in OPEC, Iraq's budget is overwhelmingly reliant on oil income.
While Iraq has been developing alternative export routes—such as pipelines to Turkey and Jordan—these remain limited in capacity and cannot compensate for the loss of seaborne exports through the Gulf.
A prolonged disruption in Hormuz would not only damage Iraq's fragile economy but also elevate geopolitical risks, forcing Baghdad into a difficult balancing act between its U.S. and Iranian alliances.
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