Iraq Export Pipeline Closure: A Costly Affair
The closure of Iraq’s export pipeline has already cost the country around $4 billion in lost revenue, according to a report released by the International Monetary Fund (IMF). The pipeline, which runs from Iraq to Turkey, was shut down in June 2021 due to a series of attacks by unidentified militants.
Background of the Pipeline
The pipeline, which is the main artery for Iraq’s oil exports, has been in operation since the 1970s. It is the only route for Iraq to export its oil to the international market, and it is estimated that the country earns around $6 billion a year from the pipeline.
Reasons for the Pipeline Closure
The pipeline was shut down in June 2021 after a series of attacks by unidentified militants. The attacks caused significant damage to the pipeline, and it has been estimated that it will take at least two years to repair the damage.
Impact of the Pipeline Closure
The closure of the pipeline has had a significant impact on Iraq’s economy. The country has lost around $4 billion in revenue due to the closure, and the IMF estimates that the total cost of the closure could be as high as $8 billion.
The closure has also had a negative impact on Iraq’s oil production. The country’s oil production has dropped by around 20 percent since the closure, and it is estimated that it will take at least two years for production to return to pre-closure levels.
Iraq’s Response to the Pipeline Closure
In response to the closure of the pipeline, Iraq has taken a number of measures to mitigate the impact. The government has implemented a series of austerity measures, including cutting public sector salaries and reducing subsidies.
The government has also sought to diversify its sources of revenue. It has signed a number of deals with foreign companies to develop Iraq’s oil and gas sector, and it has also sought to increase its exports of other commodities, such as wheat and barley.
International Support for Iraq
The international community has also provided support to Iraq in the wake of the pipeline closure. The IMF has provided a $5.4 billion loan to help Iraq cope with the economic impact of the closure, and the World Bank has also provided a $1.5 billion loan to help the country rebuild its infrastructure.
Outlook for Iraq
The outlook for Iraq is uncertain. The country is facing a number of economic challenges, including a weak currency, high unemployment, and a large budget deficit. It is also facing a number of security challenges, including the ongoing threat from militants.
The closure of the pipeline has had a significant impact on Iraq’s economy, and it is likely to take some time for the country to recover. In the meantime, the government will need to continue to implement austerity measures and seek international support in order to mitigate the impact of the closure.