Iraq is running out of money because the blockage of the Strait of Hormuz, tied to the Iran war, has prevented the country from exporting enough oil to fund its large public sector. Protests have already started, and the situation raises concerns that the conflict could destabilize Iraq again.
The country relies heavily on oil revenue to pay for its extensive public sector, and the disruption in exports has created a severe cash shortfall. With the war continuing, the economic strain is expected to worsen, and the recent protests signal growing public discontent. Analysts fear that Iraq could face renewed instability if the financial crisis persists.