Iraq’s economic stability is under growing pressure as oil revenues fail to meet the government’s monthly financial obligations, according to a warning issued by ECO Iraq, a leading economic observatory.

The group forecasts that Brent crude prices could dip to around $60 per barrel before the end of 2025, exacerbating the country’s fiscal challenges.

Key highlights from the report include:

• Monthly government spending stands at approximately 11 trillion Iraqi dinars ($7.77 billion), primarily allocated to salaries, pensions, and subsidies.
• Oil revenues, based on current prices of $65–67 per barrel, generate less than 10 trillion dinars ($7.06 billion) monthly.
• Non-oil income remains below 2 trillion dinars ($1.41 billion), leaving a widening gap between income and expenditure.

ECO Iraq attributes the anticipated drop in oil prices to increased global production, especially from the United States, and a surplus in supply amid easing geopolitical tensions in the Middle East. This trend poses a serious threat to Iraq’s fiscal health, given that over 90% of its national revenue depends on crude exports, making it one of the most oil-reliant economies in the OPEC+ alliance.

Despite approving a record budget of 211–213 trillion dinars ($148.96B–$150.37B) for 2024, Iraq’s fiscal deficit remains stubbornly high. Projections for 2025 suggest a continued shortfall of around 64 trillion dinars ($45.18 billion). By the end of July 2025, the accumulated deficit had already reached 12.15 trillion dinars ($8.58 billion).

Economists are urging the Iraqi government to diversify its revenue sources and reduce its dependence on oil to avoid deeper financial instability. Without structural reforms and alternative income streams, Iraq may face mounting economic risks in the months ahead.