Moody’s downgrades its outlook for Iraq to “negative” amid regional risks
Moody’s downgrades its outlook for Iraq to “negative” amid regional risks
2026-04-18
Shafaq News – Baghdad
Moody’s credit rating agency has lowered its outlook for Iraq from stable to negative, amid escalating risks associated with the conflict in the Middle East and its impact on the stability of the Iraqi economy.
The agency explained in a report, which was reviewed by Shafaq News Agency, that Iraq’s heavy reliance on oil exports makes it vulnerable to any disruptions in supplies, especially through the Strait of Hormuz, through which about 90% of Iraqi crude oil passes, meaning that any disruption there could lead to a significant decline in revenues and hard currency inflows.
In a related context, energy sector officials indicated that production in the southern oil fields has witnessed a sharp decline of about 80% during the past period, as a result of regional tensions and the closure of the strait, which has caused stockpiles to rise to critical levels.
Despite the announcement of the resumption of southern oil exports after a halt of more than a month, Moody’s suggested that the return of flows to normal will take time, even if the ceasefire in the region continues.
The agency also maintained Iraq’s credit rating at “Caa1”, a rating that reflects high credit risks, with ongoing economic challenges and heavy reliance on the oil sector.
shafaq.com
