Iraq says it lost US$60bil as Mideast war hits oil exports

Iraq was producing about four million barrels of oil per day before the Middle East war and exporting about 3.5 million barrels per day. (AFP pic) BAGHDAD: Iraq has lost around US$60 billion during the Middle East war, foreign minister Fuad Hussein said on Thursday, with Iran blockading a waterway that is crucial to global energy flows.

Opec member Iraq was producing about four million barrels of oil per day before the conflict, exporting about 3.5 million bpd - mostly shipped from the country's south via the Strait of Hormuz.

However, Iran's stranglehold on the waterway forced Iraq, lacking storage capacity, to halt most production and fall back on limited exports via Syria and Turkey, by truck and pipeline respectively.

"Iraq has suffered losses estimated at around 60 billion dollars during the recent war between the US and the Islamic Republic of Iran," Hussein told his Italian counterpart in Rome, according to a statement from the Iraqi foreign ministry.

After a heavy drop in production, Iraqi oil exports, which provide about 90% of the country's revenues, recovered modestly last month, reaching 2.6 million barrels per day between September 1 and 21, according to the oil ministry.

However, at the same time, Iraq's foreign currency reserves have shrunk by 20 billion dollars and consumer prices have risen sharply, plunging it into economic crisis.

To try to contain the fallout, the Central Bank of Iraq last week devalued the dinar against the dollar for the first time in more than three years.

Iraq relies heavily on foreign currency generated by oil sales to finance imports, stabilise the dinar, and pay the salaries of public sector employees and retirees.

According to the authorities, Iraq is seeking to diversify its economic resources and raise non-oil revenues from 10% to 45% by 2037.