Iraq is vulnerable to oil supply interruptions

Baghdad (IraqiNews.com) – Iraq came in second after Kuwait among the countries most exposed to oil supply risks.

A report issued by Energy Intelligence studied the impact of the spread of conflict in the Gulf and the Middle East on major oil and gas producers.

Iraq is the second-largest country vulnerable to oil supply risks in the Middle East because of its heavy reliance on oil revenues and its fragile economic foundations.

While the economies of the Gulf are all reliant on oil and gas, some of them are less diversified than others, meaning that the governments of these countries significantly depend on these resources to fund their budgets.

At 87 percent and 88 percent of their GDP, respectively, Iraq and Kuwait top the list of Middle Eastern nations that rely significantly on oil.

Although the reserves of the Central Bank of Iraq (CBI) are relatively good, supported by abundant oil revenues for 2022 and 2023, Iraq lacks a sovereign wealth fund, has a high level of debt, a significant fiscal deficit, and a poor credit rating.

Iraq also has a population of over 45 million, compared to Kuwait’s approximately 4.3 million.