Iraq’s 2027 budget built on ‘a barrel that does not exist,’ economist says

BAGHDAD — Iraq’s draft 2027 budget projects record revenue of more than 174 trillion dinars (about $115 billion at the official rate) on unrealistic assumptions about oil exports and non-oil income, economist Nabil al-Marsoumi said Sunday.

In a Facebook post, Marsoumi put the draft’s revenue at 174.233 trillion dinars: 144.72 trillion from oil and 29.513 trillion from non-oil sources. He warned that plans to raise taxes and fees would add to the financial burden on citizens.

“Public revenues are the highest in the history of Iraqi budgets, exceeding those of the three-year budget by approximately 40 trillion dinars and actual revenues achieved in 2025 by around 50 trillion dinars,” Marsoumi wrote.

The oil figures assume exports of 4 million barrels a day at $58 a barrel, against current exports of about 3 million, he wrote. “Oil revenues are built on a barrel that does not exist,” he wrote.

The 4 million barrels include 400,000 barrels a day that the Kurdistan Region is expected to deliver to the State Organization for Marketing of Oil, or Somo, the federal oil marketer. Marsoumi wrote that this assumption seemed very far from being met. The Region produced 200,000 to 250,000 barrels a day in late August, about 50,000 of it for the local market, the Region’s acting natural resources minister said at the time.

The oil minister’s export figures are higher than Marsoumi’s. Oil Minister Basim Mohammed Khudair al-Abadi said Oct. 19 that exports had risen to more than 3.4 million barrels a day in October, back to prewar levels, from an average of 3 million in September.

The draft’s $58 price is less than half the $117.64 a barrel at which Brent crude settled Friday. Brent is the global benchmark.

By Marsoumi’s breakdown, crude exports would bring in 127.02 trillion dinars (about $84 billion), crude sold to Iraq’s own refineries 17 trillion and sales of other minerals 700 billion. The export figure equals a full year of sales at 4 million barrels a day and $58 a barrel, converted at the draft’s rate of 1,500 dinars to the dollar.

“It is very difficult to achieve 17 trillion dinars from oil sales to refineries, especially after subsidies were restored for fuel supplied to construction materials factories,” he wrote. The restored subsidy cut the price of fuel oil sold to those factories from half a million dinars (about $330 at the official rate) a metric ton back to 100,000 dinars (about $66), he wrote.

The draft’s non-oil revenue target of 29.513 trillion dinars (about $19 billion) is twice what Iraq collected in 2025, Marsoumi wrote. The draft relies on collection, fees and taxes, which “squeeze the existing base rather than expand the productive base,” he wrote, adding that they would increase the burden on citizens.

Finance Committee member Abbas Ahyal put the draft’s spending at about 217 trillion dinars on Oct. 7. Against Marsoumi’s revenue figure, that leaves a gap of about 43 trillion dinars.

Oil provides more than 90% of federal revenue. Iraq has had no budget law this year. Since the three-year law covering 2023 to 2025 expired, spending has been governed by the one-twelfth rule, under which monthly spending is capped at one-twelfth of the previous year’s actual current spending while there is no budget law.

The Ministerial Council for Economy approved the draft and sent it to the cabinet on Sept. 27. It will reach parliament on Nov. 15, a month after its legal deadline, Finance Committee chair Uday Awad said Monday.