ERBIL, Kurdistan Region - The closure of the Strait of Hormuz has had a direct impact on Iraq’s economy, Iraq’s Finance Minister declared during a meeting with the British ambassador on Sunday as his ministry works to increase non-oil revenues and advance financial reforms.
The Finance ministry is seeking to overcome the current circumstances by “enhancing non-oil revenues, developing financial management tools and continuing the reform process,”
Falah al-Sari, the Iraqi finance minister stated during a meeting with British Ambassador to Iraq Irfan Siddiq in Baghdad on Sunday, where the two discussed economic and financial cooperation between Iraq and the UK, according to state-run Iraqi News Agency (INA).
“The closure of the Strait of Hormuz left direct effects on the Iraqi economy, amid the linkage of trade movement and oil flows to developments in the region,” Sari said, according to a Finance Ministry statement cited by INA.
The remarks highlight the pressure on Iraq’s finances as disruptions to shipping through Hormuz affect the movement of oil, a major source of government revenue. Iraq relies heavily on oil exports, supplying more than 85 percent of Iraq’s annual budget, according to Iraqi oil minister Bassim Khudair’s statement on Friday.
Sari also said Iraq was moving toward adopting its first budget based on programs and performance, describing it as a new approach to managing public spending by linking resource allocations to objectives, programs and results.
The British ambassador, meanwhile, reiterated his country’s support for Iraq and said the UK was ready to "continue to provide technical and advisory expertise in the economic and financial fields" to enhance the capabilities of Iraqi institutions and develop cooperation between the two countries, according to INA.
The Strait of Hormuz is a key global oil shipping route which saw the transit of nearly 90 percent of Iraq’s seaborne crude oil, according to pre-war figures. Disruptions to maritime traffic, regional escalations, and subsequent blockades have affected oil flows and trade across the region since the conflict involving Iran, Israel and the US began on February 28, imploring Baghdad to actively seek diversification of its oil transit routes.
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