Iraq Says the Iran War Has Cost It About $60 Billion, a Week After Devaluing the Dinar

Analysis

Iraq's foreign minister, Fuad Hussein, told his Italian counterpart in Rome on October 15 that Iraq "has incurred losses estimated at approximately $60 billion" during the war between the United States and Iran. That is the Iraqi government's own estimate. It gave no breakdown, and AA has not independently verified it. Eight days earlier, Baghdad cut the official value of the dinar. Together, the events illustrate a fiscal mechanism through which a Gulf war can pressure a country that is not fighting in it, but the cited record does not establish that the war caused the exchange-rate decision.

The one-minute reading

Iraq says the United States–Iran war has cost it about $60 billion, but the government has not published a calculation and the figure may refer specifically to lost oil revenue. The mechanism behind the pressure is clearer than the total. Oil Ministry figures carried by Iraq Business News show exports falling from 99.9 million barrels in February to 18.6 million in March as Strait of Hormuz shipping was disrupted.

On October 7, Baghdad changed the household and business dollar rate from 1,320 to 1,520 dinars. A weaker dinar lets the government convert each oil dollar into more local currency for salaries and pensions, but it also raises the dinar cost of imports. The cited record does not prove the war caused that decision or reveal current central-bank reserves. A published breakdown of the $60 billion, official reserve data and a sustained recovery in exports would show whether this is a temporary cash-flow shock or a deeper fiscal and currency problem.

The five-minute analysis

Foreign Minister Fuad Hussein told his Italian counterpart on October 15 that Iraq had suffered approximately $60 billion in losses during the United States–Iran war, according to the Iraqi News Agency . Italy's foreign ministry confirmed the meeting , but its communiqué did not mention the number. Iraq supplied no method, period or components for the estimate. An earlier account described about $60 billion in lost oil revenue, which is not necessarily the same as total economic losses.

The country's exposure begins with how it earns money. Iraq sells crude for dollars, and most of that crude leaves through the Gulf. Oil Ministry figures carried by Iraq Business News show 99,872,220 barrels exported in February , worth about $6.81 billion. March exports fell to 18,604,951 barrels , worth about $1.96 billion. That is an approximately 81 percent fall in barrels and 71 percent fall in value. Higher prices softened the revenue decline, but could not offset the collapse in volume.

That loss of dollar income matters because oil has supplied about 90 percent of state revenue, according to reporting cited in the article. The government receives dollars for oil but pays salaries, pensions and many domestic bills in dinars. When fewer dollars arrive, it must draw on reserves, cut or delay spending, borrow, find other revenue or change how many dinars each dollar produces.

Baghdad chose the last mechanism on October 7. Reports of the Council of Ministers decision say the Finance Ministry now sells a dollar to the central bank for 1,500 dinars, banks buy at 1,510, and households and businesses buy at 1,520 rather than 1,320. At the retail rate, a dollar costs about 15 percent more dinars; expressed in dollars, the dinar is worth about 13 percent less.

The fiscal benefit and household cost are two sides of the same exchange rate. Each oil dollar now becomes more dinars, helping the government stretch reduced dollar receipts across local-currency obligations. But imported goods are priced in dollars, so households and businesses need more dinars to buy them. That can raise living costs, especially for people whose dinar income does not adjust. The central bank says the change supports local industry and that reserves are adequate and strong, but the article could not retrieve its reserve data.

The timing supports a mechanism, not a proven cause. Officially reported export volume and revenue fell sharply, and the government later devalued the dinar. The new rate yields more local currency per oil dollar. Yet the cited documents do not establish that war losses caused the exchange-rate decision, and the $60 billion is not an audited total. If export receipts stay weak without an offset from prices, other revenue, financing or spending changes, pressure on reserves or the currency could persist.

Three observations would change the assessment: a sustained return of exports toward February's level, primary central-bank reserve data, and a government breakdown of the $60 billion. Recovery in all three would support a temporary disruption. Continued weak exports, falling reserves and a widening gap between official and street exchange rates would point to a more durable financing problem.

The distribution of the cost matters too. The government receives more dinars for each oil dollar, which helps it meet dinar obligations. Households paid in dinars face the opposite conversion when buying imported goods. Several lawmakers objected on that basis, while an unofficial translation of a central-bank statement carried by Iraq Business News says the change supports domestic production. Both effects can occur: imports become dearer while locally produced substitutes become relatively cheaper. Whether local supply can expand fast enough to offset higher import costs is not established in the cited record. Inflation, official and street exchange rates, and household purchasing power would show where the burden lands.

What Iraq said

The Iraqi News Agency , the state news agency, reported the minister's remarks from his meeting with Italy's foreign minister, Antonio Tajani. Hussein said the conflict had worsened a "global energy crisis" and raised concerns about inflation in Europe as well as in Iraq.

The meeting is confirmed by the Italian foreign ministry , whose October 15 communiqué covers regional security and trade. It does not mention the $60 billion figure.

No method was given. Rudaw noted that the ministry "did not provide a breakdown of the losses or explain how the figure was calculated."

It may not be a new number. On October 8, Al Jazeera reported Prime Minister Ali al-Zaidi as saying Iraq had lost about $60 billion in oil revenue. "Losses" and "lost oil revenue" are different measures. The government has not said which one the Rome figure is. AA has not independently verified the earlier oil-revenue figure either.

Why Hormuz matters so much to Iraq

Iraq earns its dollars by selling crude, and most of that crude leaves through the Gulf. The Oil Ministry's own monthly figures, carried by Iraq Business News, show what happened when shipping through the Strait of Hormuz was disrupted:

February 2026: 99,872,220 barrels exported, worth $6,814,585,000.

March 2026: 18,604,951 barrels , worth $1,957,121,000.

That is a fall of about 81 percent in barrels and about 71 percent in export value in one month (AA's calculation); higher prices in March cushioned the revenue loss. Rudaw, citing the state oil marketer, puts August exports back up at about 73.68 million barrels, still below February's level. Rudaw also reports that oil previously supplied about 90 percent of state revenue. AA read these ministry figures through the outlets and not on the ministry's own site.

The devaluation: how an oil state stretches scarce dollars

On October 7, after Council of Ministers decision No. 544 the day before, the official exchange rate changed, as Kurdistan24 and Shafaq News report:

The Finance Ministry now sells each dollar to the central bank for 1,500 dinars.

Banks buy at 1,510.

Households and businesses buy at 1,520, up from 1,320.

At the retail rate, a dollar now costs about 15 percent more dinars. Put the other way, the dinar is worth about 13 percent less in dollars (AA's calculation).

The mechanism. The government's oil money arrives in dollars, but salaries and pensions are paid in dinars. To pay them, the Finance Ministry sells its dollars to the central bank for dinars. Raising the rate means every oil dollar now converts into more dinars. That stretches a smaller dollar income across the same dinar bills. Rudaw reports a budget gap of more than 29 trillion dinars, about $22.4 billion, in the first seven months of 2026, citing Finance Ministry figures.

An analogy, with limits: it is like a family paid in a foreign currency that renegotiates how many local notes each foreign note buys. The family's budget stretches further, but every imported good it buys costs more. The analogy breaks down because in Iraq the central bank pays for the Finance Ministry's dollars with dinars it creates, so a higher rate also means more new dinars per oil dollar, something no family can do.

Who pays. Imported goods are priced in dollars, so a weaker dinar tends to raise what Iraqi households pay for them. Several MPs objected for that reason. One told Al Jazeera the move could "inflict severe harm on the poor and vulnerable." Iraq Business News's unofficial translation of a statement it identifies as the central bank's says the change "supports national products and local industry." The statement also says its foreign reserves are adequate and strong. That is the central bank's claim. AA could not read its reserve data.

Asymmetric Analysis

Ministry figures carried by Iraq Business News show export volume and value falling sharply from February to March, and the government later devalued the dinar. Thesis, not established cause: converting each oil dollar at the new rate yields more dinars for domestic obligations.

If export receipts remain depressed and are not offset by higher prices, other revenue, spending changes or financing, pressure on reserves or the exchange rate could persist. The cited evidence does not establish that another devaluation is likely.

Not justified: reading the $60 billion as an audited figure, or comparing it to Iraq's GDP. The figure has no stated method and may count only lost oil revenue.

What would change the view: a sustained return of exports to February levels, published central bank reserve data, or a government breakdown of the $60 billion.

What the evidence does not show

How the $60 billion was calculated, or over what period.

The central bank's current reserves. Figures reported in the press conflict, and AA could not read the bank's own data.

The central bank and Council of Ministers texts directly. AA read them through the outlets named above because the official pages could not be retrieved.

What we're watching

The Oil Ministry's September and October export figures, any published central bank reserve data, the parliamentary debate on the exchange rate, and the gap between the official and street dollar rates.

Sources

Official: Iraqi News Agency (Oct 16) ; Italian Ministry of Foreign Affairs (Oct 15) .

Outlet reports carrying claimed official statements and data: Central Bank of Iraq statement, translated by Iraq Business News ; Kurdistan24 (Arabic), Council of Ministers and Finance Ministry rates ; Shafaq News ; Oil Ministry February exports and March exports , via Iraq Business News.

Reporting: Rudaw (Oct 16) ; Rudaw (Oct 7) ; Al Jazeera (Oct 8) .

Statements by officials are reported as their own claims. Figures marked as not independently verified have not been checked by AA against an original document.