Iraq’s overreliance on oil threatens economic, political strife

More than 90 percent of Iraq’s government revenue comes from oil, leaving the country hostage to global prices.

With an economy so reliant on oil, Iraq has long faced a tough balancing act between the short-term gains that can come from ramping up production and the long-term problems that can arise from overproduction.

Last week, the Iraqi oil ministry announced that it was rectifying a swing too far in one direction when it announced that it would be curbing oil exports to 3.3 million barrels per day (bpd) after having exceeded since January a quota imposed by the OPEC+ oil cartel.

Production for March will be 130,000 bpd lower than in February, which will keep Iraq’s partners in the Organization of the Petroleum Exporting Countries (OPEC) content.

But future tensions could arise if Iraq hits any unforeseen economic hurdles and falls back on overproduction.

“The whole political economy is driven by oil,” an analyst, who asked to withhold their name due to the sensitivity of their work, told Al Jazeera.