Iraq plans 2027 budget with $58 oil price estimate

Iraq’s government has proposed a 2027 federal budget totaling 217 trillion Iraqi dinars, or roughly $166 billion, based on an estimated oil price of $58 per barrel. Parliamentarians familiar with the draft budget revealed that this spending plan would create a fiscal deficit of about 40 trillion dinars ($30.6 billion). The budget anticipates crude oil exports averaging four million barrels per day, including shipments from Iraqi Kurdistan.

The Iraqi cabinet is also considering adjustments to the local currency’s exchange rate, potentially raising it to between 1,400 and 1,500 dinars per US dollar, up from the current rate of around 1,300. Oil exports remain the backbone of Iraq’s revenue, contributing approximately 80 percent of the general budget’s resources.

The US-Israeli military conflict with Iran has disrupted shipping through the Strait of Hormuz, prompting Iraq to explore alternative routes for its crude oil exports. The Iraqi parliament is set to begin official discussions on the 2027 federal budget soon.

The proposed budget introduces a structural shift, allocating 150 trillion dinars ($114.5 billion) for traditional spending and 50 trillion dinars ($38.2 billion) for a new World Bank-coordinated program aimed at improving expenditure efficiency.