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

Iraq has delayed July public salaries due to a significant drop in oil revenue caused by the ongoing closure of the Strait of Hormuz. The country, which spends approximately $6.5 billion monthly on salaries and welfare, saw its oil exports plummet from 100 million barrels in February to around 32 million in May and June. A senior Finance Ministry official stated, “if the export disruption continues, we will not be able to pay salaries in time from now on.” Despite Iran's promises of exemption, Iraqi vessels have been targeted in the strait, impacting the nation's oil-dependent economy, which relies on oil for 90% of government revenue.

• Iraq is offering discounts of nearly $30 a barrel on Basra crude to attract buyers, reflecting the increased risk of shipping.
• The country renewed a one-year agreement with Turkey to export oil through the Iraq-Turkey pipeline, with a daily capacity of 750,000 barrels.
• An oil expert noted that the size of the discount fluctuates with the level of risk, not a production surplus.