Iraq's foreign reserves drop 12% as oil price sensitivity deepens

Iraq’s foreign currency reserves have declined by 12 percent over the past two years, leaving the country’s fiscal buffer increasingly vulnerable to fluctuations in global oil prices.

According to experts cited by Shafaq News, the reserves remain at risk of further deterioration if Brent crude slips below the $60 per barrel threshold.

As reported earlier, Iraqi officials have threatened to withdraw from the cartel unless granted a significant increase in their production quota.

The warning underscores the structural fragility of Iraq’s balance sheet, which remains heavily dependent on hydrocarbon exports.

With the country’s budget and external liquidity tied directly to energy revenues, any sustained period of lower prices would force difficult choices between maintaining sovereign debt service, funding public sector wages, and preserving foreign exchange liquidity.

This financial pressure coincides with Baghdad’s escalating dispute with OPEC.

As reported earlier, Iraqi officials have threatened to withdraw from the cartel unless granted a significant increase in their production quota.