The ongoing blockade of the Strait of Hormuz, a critical oil export route, is causing significant financial difficulties for Iraq. The country relies heavily on this passage, with 80% to 90% of its oil exports shipped through it, and lacks substantial alternative routes. As a result, Iraq's government is running out of cash, leading to delayed salary payments for thousands of public sector employees.

Mahmoud Waleed, a 38-year-old teacher paid by the Iraqi Ministry of Education, has experienced increasingly late salary payments over the past three months. Like many Iraqis, he faces financial obligations and basic living expenses, prompting concerns about economic stability. "We're just more and more convinced that we need to reduce expenses and keep some money aside for emergencies — just until things return to normal. It makes you really anxious and fearful," Waleed said.

Despite these challenges, the government has indicated that salaries can be paid for the next 10 to 11 months. Ben May, director of global macro research, stated, "Until at least 2028, traffic levels are expected to fluctuate as tensions ebb and flow, while on average remaining well below pre-conflict norms."

Concerns about social unrest persist. Hayder al-Shakeri, a research fellow at the British think tank Chatham House, noted that while more protests might occur if salary delays continue, they are likely to remain sectoral rather than escalate into a nationwide movement like the youth-led Tishreen protests between 2019 and 2021. "The government has learned from 2019 and now has a range of political, administrative and security mechanisms to contain protests before they broaden," al-Shakeri added.

Currently, none of the state employees interviewed by Deutsche Welle planned to join protests if their salaries were delayed again, and the situation is considered unlikely to destabilize Iraq at this time.

Iraqi economist Ali Al-Rawi also highlighted the economic strain in a recent report for the Baghdad-based Al Bayan Center.

Sources