Oil price fears put Baghdad at pay shortfall risk, expert says

Shafaq News – Baghdad

Iraq, the oil-reliant state, could face a serious crisis in securing salaries if global oil prices decline, an Iraqi expert warned on Wednesday.

Economist Ahmed Saddam told Shafaq News that pensions remain secure for now and that there is no immediate liquidity crisis threatening them, describing the delays as primarily administrative and organizational rather than financial.

Saddam noted that the government is heavily focused on operational expenditures, particularly salaries for employees, retirees, and social welfare beneficiaries, at the expense of investment spending. 70% of the federal budget goes to salaries and current expenditures, meaning any decline in oil revenues directly impacts liquidity, he stated.

Saddam also pointed to “US administration efforts to push prices down to $55–60 per barrel.” There are indications of pressure from the US Federal Reserve related to oil smuggling, forgery, and the mixing of Iraqi crude with other grades, he explained, cautioning that these concerns could lead to restrictions on Iraq’s oil exports or on dollar transfers between Baghdad and Washington.