Baghdad Fears Iranian Retaliation, Cites Iraq as Key Missile Route

Image of a drone launch from a video posted by the “Islamic Resistance in Iraq” on Telegram
Image of a drone launch from a video posted by the “Islamic Resistance in Iraq” on Telegram
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Baghdad Fears Iranian Retaliation, Cites Iraq as Key Missile Route

Image of a drone launch from a video posted by the “Islamic Resistance in Iraq” on Telegram
Image of a drone launch from a video posted by the “Islamic Resistance in Iraq” on Telegram

Politicians and analysts believe Iraq is particularly worried about a potential conflict between Iran and Israel. This is because Iraqi airspace and territory might be the main route for Iranian missiles.
While many Iraqis seem indifferent to the possibility of a war, there is a heated debate online. Some critics of Iran are dismissive of the threat, while its supporters expect a strong retaliation.
A political source close to the Coordination Framework warns that Iraq, given its location near both Iran and Israel, could be heavily affected by a conflict between Tehran and Tel Aviv.
The source, speaking to Asharq Al-Awsat under conditions of anonymity, noted that Iraq’s ability to prevent or handle the fallout from such a conflict is nearly nonexistent.
If a war breaks out, Iraqi territory will be exposed, similar to the situation in April when Iranian missiles flew over Iraq to strike Israel.
The source explained that Iranian attacks could happen in two ways: through missiles crossing Iraqi airspace or via missiles launched by Iranian-aligned factions inside Iraq.
In both cases, it would be very difficult for the Iraqi government to respond, given its lack of control over these groups.
There are also concerns that these factions might launch broader attacks on their own, even without direct orders.
Additionally, if the conflict escalates uncontrollably, Israel might target important infrastructure in Iraq directly. This includes possible threats to Basra’s ports, similar to past Israeli actions in Yemen, if Iraqi factions join the conflict on Iran's side.
Former diplomat Ghazi Faisal agrees that the Iraqi government has limited ability to avoid the fallout from a potential conflict between Iran and Israel.
Faisal told Asharq Al-Awsat that Baghdad is trying to stay neutral amid the regional tensions and conflicts, including those involving Iran.
Despite efforts to address factions responsible for past attacks, Faisal said the Iraqi government cannot control or deter armed groups linked to the Iranian Revolutionary Guard.
While the Iraqi government aims to avoid war and supports Palestinian rights, Faisal warned that Iraq’s stance could become divided if a conflict breaks out, due to the complex ties between local factions and Tehran.



Iraq Faces 2025 Fiscal Squeeze Amid Oil Price Decline, Adviser to PM Says 

A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)
A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)
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Iraq Faces 2025 Fiscal Squeeze Amid Oil Price Decline, Adviser to PM Says 

A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)
A general view shows an oil rig used in drilling at the Zubair oilfield in Basra, Iraq, July 5, 2022. (Reuters)

Iraq faces a budget crunch in 2025 due to the slump in the price of oil, the overwhelming source of government revenue, a top economic adviser to Prime Minister Mohammed Shia al-Sudani said.

"We don't anticipate major problems in 2024, but we need stricter financial discipline for 2025," Mudher Saleh told Reuters in an interview late on Monday.

Iraq, OPEC's second-largest producer, is heavily dependent on oil revenues. The hydrocarbons sector accounts for the vast majority of export earnings and some 90% of state revenue.

This huge reliance on oil makes Iraq particularly vulnerable to fluctuations in global crude prices.

Still, Iraq increased its budget in 2024 even after record spending in 2023, when more than half a million additional employees were hired into the already-bloated public sector and a capital-intensive nationwide infrastructure revamp began.

The 2024 budget rose to 211 trillion dinars ($161 billion) from 199 trillion dinars ($153 billion) in 2023, maintaining a projected deficit of 64 trillion dinars, Saleh said.

The budget assumes an oil price of $70 per barrel in 2024, around $6 less than the likely average price this year.

Saleh said that paying salaries and pensions on time remain a top priority. They account for 90 trillion dinars ($69 billion), or over 40% of the budget, and are a key factor of social stability in Iraq.

"The government will pay salaries even if it costs everything. Salaries are holy in Iraq," he said.

Infrastructure development, meanwhile, could be refocused on the most strategic projects - such as key road and bridge works in the capital Baghdad - if the state finds itself in a financial crunch, he said.

To bolster finances, Iraq is focusing on increasing non-oil revenues through improved tax collection but is not exploring any new levies, Saleh said.

He estimated that Iraq loses up to $10 billion annually due to tax evasion and customs-related problems.

Concerns for the 2025 budget reflect a challenging global oil market. Oil prices have been on a downward trend since mid-2022, with Brent crude, the international benchmark, falling from over $120 per barrel to below $75 in recent days.

This decline is largely attributed to weakening global demand, particularly from China, the world's largest oil importer, as its economic growth slows down.