Iraq's Fiscal Crisis Deepens as Oil Revenues Collapse

Strait of Hormuz blockade caused oil revenue collapse, forcing Iraq to delay public salaries for five weeks, causing market slowdown and family hardship. Iran attacked Iraqi vessels despite promised exemptions. Crisis adds urgency to energy diversification and militia disarmament negotiations. Potential U.S.-Iran Strait of Hormuz deal seen as resolution. Government publicly admits salary crisis: only 3 trillion dinars available against 8 trillion needed, oil revenues halved. India's Reliance paid record $25M to ship Iraqi crude (12x normal rates). Oil revenue fell 18% in 2026 vs 2022, confirming fiscal strain.