Wednesday 18/March/2026 – 01:03 AM
placed Standard & Poor’s Global, Iraq’s long-term sovereign credit rating is at B-, under negative watch, indicating the risk of downgrading the rating after a sharp decline in Iraqi oil production as a result of the escalation of the conflict in the Middle East.
Standard & Poor’s puts Iraq’s sovereign rating on negative watch
Iraq’s oil production decreased to about 1.2 million barrels per day from 4.2 million barrels per day, following the effective closure of the Strait of Hormuz since the escalation of regional tension on February 28.
Iraq has the fifth largest proven reserve of crude oil in the world, and is the third largest oil exporter in the OPEC+ alliance after Saudi Arabia and Russia, as oil constitutes about 60% of Iraq’s gross domestic product, 90% of state revenues, and 95% of the revenue from commodity exports.
Standard & Poor’s said that the continued cessation of oil production for a long period will negatively affect Iraq’s financial and external situation in 2026, even with the presence of large foreign currency reserves.
The agency added that the financial situation of the Iraqi government is strongly affected by oil prices and revenues, and this temporary decline is likely to reduce government revenues and reduce spending further, expecting the government to resort to using its reserves to meet its obligations related to foreign debt.
Iraq’s international reserves approached $97 billion in mid-February, roughly equivalent to ten months’ current account payments, with Iraq keeping about a quarter of them in the form of gold.
