Media: Iraq seeks IMF financial support after Iran conflict disrupts oil flows

Iraqi officials have approached the International Monetary Fund for financial assistance following disruptions linked to the conflict in the Middle East, according to a source familiar with the IMF discussions.

Initial conversations took place during last month’s spring meetings of the International Monetary Fund and World Bank in Washington, with talks continuing over the scale of potential funding and how any loan programme might be structured, according to Reuters.

The discussions come after the war that began on February 28 with a large-scale U.S.-Israeli bombing campaign against Iran, which subsequently led Tehran to close the Strait of Hormuz, a critical route for global energy shipments.

The closure has significantly disrupted Iraq’s economy, according to the source, with most of the country’s oil exports—its primary source of government revenue—affected. The Strait of Hormuz previously carried around one-fifth of global crude flows.

No immediate comment was available from the IMF or the Iraqi embassy.

Iraq, which holds the world’s fifth-largest proven petroleum reserves, remains heavily dependent on oil exports for state revenue.

According to IMF data, Iraq last had a financial arrangement with the Fund in the form of a $3.8 billion standby agreement that expired in July 2019. Of that programme, $1.49 billion was disbursed.

Iraq currently owes the IMF about $2.39 billion, including roughly $891 million under a rapid financing instrument.