A rising demand for direct payouts from Iraq’s oil revenues is fueling lawsuits and economic concerns. Experts warn that this could push Iraq to the edge of bankruptcy within a year.
Economic analyst Nabil Al-Marsoumi estimates Iraq’s 2024 oil revenues at $90 billion, with non-oil revenues at just $13 billion. This is barely enough to cover essential government spending, such as electricity, gas, and food rations.
Al-Marsoumi cautions that using oil revenues for direct cash payments could drain the central bank’s reserves. This would force the government to borrow or print money to meet its $70 billion annual spending on salaries and social benefits. The result, he warns, would be hyperinflation, a sharp drop in the value of the Iraqi dinar, and a looming economic crisis. Even distributing half of the oil revenues, he says, would only delay the collapse by two years.
These warnings come amid a wave of lawsuits filed by Iraqis, citing Article 111 of the constitution, which states that “oil and gas belong to all the people of Iraq in all regions and governorates.” Legal experts argue that managing national wealth through public services, rather than direct payouts, is a more common practice worldwide, raising legal and financial complexities.
Supporters of the lawsuits view them as a response to growing dissatisfaction with how Iraq’s governments have handled the nation’s resources. Many are considering joining the legal action if it gains traction.