Iraq Builds 2027 Budget on $58 Oil—and a Very Large Deficit
Iraq Builds 2027 Budget on $58 Oil—and a Very Large Deficit Julianne Geiger is a veteran energy journalist and market analyst with more than a decade of experience covering the global oil and gas sector.
Her… Iraq is building its 2027 budget around $58 oil, a far cry below what the country actually needs to balance its books.
The draft budget assumes crude exports of roughly 4 million barrels per day, including Kurdistan, with total spending of 217 trillion dinars, or about $166 billion.
Even at those assumptions, lawmakers say the budget would run a deficit of more than 40 trillion dinars.
At 4 million bpd and $58 per barrel, Iraq would generate roughly $85 billion in annual gross crude export revenue before accounting for discounts, transport costs and other adjustments.
For comparison, the International Monetary Fund put Iraq’s 2025 fiscal oil breakeven price at about $92.43 per barrel.
Baghdad may be assuming $58 oil for budgeting purposes, but if crude actually averages $58 next year, Iraq would be left with a deficit of more than 40 trillion dinars and would have to cover that gap through borrowing, spending cuts, reserve drawdowns or other revenue.
The government is also considering weakening the dinar to somewhere between 1,400 and 1,500 per U.S.
Because Iraq sells oil in dollars but spends heavily in dinars, a weaker currency increases the local-currency value of every export dollar.
It also makes imported goods more expensive.
Oil still provides the overwhelming majority of Iraqi state revenue, leaving Baghdad unusually exposed to anything that interrupts either production or exports.
That vulnerability was on full display this year.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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