Iraq has long had to juggle the benefits of oil production with the drawbacks of overproduction. The recent decision by the Iraqi oil ministry to reduce oil exports to 3.3 million barrels per day indicates a move towards balance after exceeding the OPEC+ quota.
The Iraqi government relies heavily on oil revenue, with over 90 percent of its income coming from oil. The high budget passed last year aims to invest in Iraq’s future and create jobs in the public sector. However, this budget relies heavily on oil prices remaining high, posing risks to the economy if prices drop.
One challenge for Iraq is its relationship with the Kurdistan Regional Government (KRG), which has often sold oil independently. Disputes between Baghdad and the KRG over oil management have led to tensions and legal battles with countries like Turkey.
Corruption and regional disparities further complicate Iraq’s economic situation. Without diversifying its economy and implementing reforms, Iraq’s progress towards stability could be derailed. The long road to economic sustainability will require political and economic changes, rather than short-term fixes.