Iraq has postponed the payment of July salaries for public employees as the country grapples with a severe contraction in oil revenue driven by the ongoing blockade of the Strait of Hormuz.
The delay underscores the immediate fiscal strain on Baghdad’s budget, which relies heavily on hydrocarbon exports to fund state operations and public sector wages.
According to figures from Iraq’s Oil Ministry, crude exports have plummeted from 100 million barrels in February to approximately 32 million barrels in both May and June.
According to figures from Iraq’s Oil Ministry, crude exports have plummeted from 100 million barrels in February to approximately 32 million barrels in both May and June.
This sharp decline reflects the physical inability to move product through the critical chokepoint, rather than a drop in production capacity.
The revenue shortfall has left the government with insufficient liquidity to meet its payroll obligations on schedule.
The export collapse follows a broader escalation in regional tensions, including Iran’s suspension of communication with the United States and its stated intent to fully block the strait.