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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)
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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.

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Former Israeli Spies Describe Attack Using Exploding Electronic Devices against Lebanon’s Hezbollah

An ambulance rushes wounded people to the American University of Beirut Medical Center, on September 17, 2024, after explosions hit locations in several Hezbollah strongholds around Lebanon amid ongoing cross-border tensions between Israel and Hezbollah fighters. (Photo by Anwar AMRO / AFP)
An ambulance rushes wounded people to the American University of Beirut Medical Center, on September 17, 2024, after explosions hit locations in several Hezbollah strongholds around Lebanon amid ongoing cross-border tensions between Israel and Hezbollah fighters. (Photo by Anwar AMRO / AFP)
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Former Israeli Spies Describe Attack Using Exploding Electronic Devices against Lebanon’s Hezbollah

An ambulance rushes wounded people to the American University of Beirut Medical Center, on September 17, 2024, after explosions hit locations in several Hezbollah strongholds around Lebanon amid ongoing cross-border tensions between Israel and Hezbollah fighters. (Photo by Anwar AMRO / AFP)
An ambulance rushes wounded people to the American University of Beirut Medical Center, on September 17, 2024, after explosions hit locations in several Hezbollah strongholds around Lebanon amid ongoing cross-border tensions between Israel and Hezbollah fighters. (Photo by Anwar AMRO / AFP)

Two recently retired senior Israeli intelligence agents shared new details about a deadly clandestine operation years in the making that targeted Hezbollah militants in Lebanon and Syria using exploding pagers and walkie talkies three months ago.
Hezbollah began striking Israel almost immediately after Hamas’ Oct. 7, 2023, attack that sparked the Israel-Hamas war, The Associated Press said.
The agents spoke with CBS “60 Minutes” in a segment aired Sunday night. They wore masks and spoke with altered voices to hide their identities.
One agent said the operation started 10 years ago using walkie-talkies laden with hidden explosives, which Hezbollah didn't realize it was buying from Israel, its enemy. The walkie-talkies were not detonated until September, a day after booby-trapped pagers were set off.
“We created a pretend world,” said the officer, who went by the name “Michael.”
Phase two of the plan, using the booby-trapped pagers, kicked in in 2022 after Israel's Mossad intelligence agency learned Hezbollah had been buying pagers from a Taiwan-based company, the second officer said.
The pagers had to be made slightly larger to accommodate the explosives hidden inside. They were tested on dummies multiple times to find the right amount of explosive that would hurt only the Hezbollah fighter and not anyone else in close proximity.
Mossad also tested numerous ring tones to find one that sounded urgent enough to make someone pull the pager out of their pocket.
The second agent, who went by the name “Gabriel,” said it took two weeks to convince Hezbollah to switch to the heftier pager, in part by using false ads on YouTube promoting the devices as dustproof, waterproof, providing a long battery life and more.
He described the use of shell companies, including one based in Hungary, to dupe the Taiwanese firm, Gold Apollo, into unknowingly partnering with the Mossad.
Hezbollah also was unaware it was working with Israel.
Gabriel compared the ruse to a 1998 psychological film about a man who has no clue that he is living in a false world and his family and friends are actors paid to keep up the illusion.
“When they are buying from us, they have zero clue that they are buying from the Mossad,” Gabriel said. “We make like ‘Truman Show,’ everything is controlled by us behind the scene. In their experience, everything is normal. Everything was 100% kosher including businessman, marketing, engineers, showroom, everything.”
By September, Hezbollah militants had 5,000 pagers in their pockets.
Israel triggered the attack on Sept. 17, when pagers all over Lebanon started beeping. The devices would explode even if the person failed to push the buttons to read an incoming encrypted message.
The next day, Mossad activated the walkie-talkies, some of which exploded at funerals for some of the approximately 30 people who were killed in the pager attacks.
Gabriel said the goal was more about sending a message than actually killing Hezbollah fighters.
“If he just died, so he’s dead. But if he’s wounded, you have to take him to the hospital, take care of him. You need to invest money and efforts,” he said. “And those people without hands and eyes are living proof, walking in Lebanon, of ‘don’t mess with us.’ They are walking proof of our superiority all around the Middle East.”
In the days after the attack, Israel's air force hit targets across Lebanon, killing thousands. Hezbollah's leader, Hassan Nasrallah, was assassinated when Israel dropped bombs on his bunker.
By November, the war between Israel and Hezbollah, a byproduct of the deadly attack by Hamas group in southern Israel on Oct. 7, 2023, ended with a ceasefire. More than 45,000 Palestinians have been killed in the war in Gaza between Israel and Hamas militants, health officials have said.
The agent using the name “Michael” said that the day after the pager explosions, people in Lebanon were afraid to turn on their air conditioners out of fear that they would explode, too.
“There is real fear,” he said.
Asked if that was intentional, he said, “We want them to feel vulnerable, which they are. We can’t use the pagers again because we already did that. We’ve already moved on to the next thing. And they’ll have to keep on trying to guess what the next thing is.”