Gulf tensions raise fears for Iraqi's oil-funded economy

Rising military tensions in the Persian Gulf are casting a heavy shadow over Iraq's economy, raising concerns about the fate of oil exports and maritime trade.

The recent targeting and burning of two foreign tankers carrying Iraqi oil within Iraq's territorial waters marks a significant escalation, signaling that a closure of the Strait of Hormuz is now a tangible threat. Such a scenario would halt Iraq's oil exports to global markets, dealing a severe blow to an economy that relies on oil revenues as its main source of funding for both operational and investment budgets.

With the main maritime route for its oil exports disrupted, Iraq is now looking to the central bank's reserves to cushion the shock of lost oil revenues and to ensure the payment of government employees' salaries.

"The other impact Iraq fears is the economic fallout from the closure of the Strait of Hormuz. This will affect Iraq just as it will other countries, but it will hit Iraq harder, because Iraq relies mainly, almost 90 percent of its resources, on oil sales. So the economic impact on Iraq will be significant. The consequences are both political and economic," said Hamza Mustafa, an Iraqi journalist.

The Iraqi government has few alternatives for exporting oil through other routes. The Ceyhan pipeline, which carries Iraqi oil through Turkey, remains shut, leaving the Gulf, now a conflict zone, as the only outlet. Recently, Iraqi officials have begun discussing the need to boost non-oil revenues to mitigate the economic impact of the ongoing conflict.

"We are doing everything in our power to keep this war away from our country, because Iraq cannot withstand more conflict. Our country has reached a critical economic stage in recent years, both before and after the previous regime. We have learned many lessons. As parliament, we will push for decisions that serve our citizens and our country," said Saqr Al-Muhammadawi, a member of Iraq's parliament.

According to a statement by Alireza Tangsiri, commander of the Iranian Navy, the Strait of Hormuz has not yet been militarily blocked and is merely under control. The strait "is only closed to the tankers and ships belonging to our enemies, to those who are attacking us and their allies. Others are free to pass," he said.

Gulf tensions raise fears for Iraqi's oil-funded economy

A Chinese mainland spokesperson on Wednesday slammed Taiwan leader Lai Ching-te over his latest remarks on cross-Strait relations, accusing him of promoting secessionism and escalating tensions across the Taiwan Strait.

Chen Binhua, spokesperson for the Taiwan Affairs Office of the State Council, said in a press release that Lai's speech marking his second anniversary in office was "filled with lies and deception, hostility and confrontation."

Chen accused Lai of stubbornly adhering to a secessionist stance in pursuit of "Taiwan independence," while exaggerating the so-called threats from the mainland and intensifying confrontation across the Strait.

Lai played an old trick of advocating the secessionist agenda on one hand and, on the other, calling insincerely for dialogue and exchanges with the mainland, attempting to mislead people in Taiwan and deceive the international community, he said.

Chen said that these common tricks have been seen through by more and more Taiwanese people. Their deceptive and provocative actions will be met with firm opposition from compatriots on both sides and the international community, and are doomed to fail.

Reaffirming the mainland's position on the Taiwan question, Chen said Taiwan has never been a country, is not one now, and will never become one in the future.

He described the Taiwan question as a historical issue left over from a Chinese civil war in the 1940s.

No election result in Taiwan could alter the fact that Taiwan is part of China or sever the historical and legal bonds linking the two sides of the Strait, according to Chen.

The mainland would never allow any person or force to pursue secessionist activities under any pretext, he added.

Calling secessionists "the chief culprit" who undermines cross-Strait peace, Chen said the mainland would continue to uphold the one-China principle and the 1992 Consensus, unite broadly with Taiwan compatriots, combat secessionist activities, and safeguard peace and stability across the Strait.

Central government spokesperson refutes Lai Ching-te's latest remarks, warns against secessionist moves