Question: “What will happen to Iraq’s economy because of the Israeli-Iran war?” If tensions escalate into direct military confrontation the entire Middle East could see disruptions in oil production and exports. Iran might attempt to close or threaten the Strait of Hormuz…which about 1/5 of the worlds oil passes. Such a move would instantly raise global oil prices. For Iraq this volatility can be both a blessing and a curse. Higher oil prices would mean increased revenue for the Iraqi government… However prolonged regional instability could threaten Iraq’s own oil infrastructure, delay foreign investment and raise security risks for international companies operating in the country.
