ERBIL, Kurdistan Region of Iraq - Iraq is facing an estimated monthly financial gap of about $9.5 billion due to declining oil exports and the closure of the Strait of Hormuz, a financial adviser to the prime minister said Friday, noting that authorities are preparing emergency measures to contain the impact.

Iraq exported nearly 100 million barrels per day in February before the US-Iran war started, generating $6 billion. The number dropped to 18.6 million barrels and just shy of $2 billion for March, then less than 10 million barrels and barely over $1 billion for April.

Mudher Mohammed Salih, financial adviser to Prime Minister Ali al-Zaidi, told the Iraqi state media that the finance ministry is preparing a “three-part emergency plan that includes domestic borrowing, foreign borrowing, and measures to increase non-oil revenues through taxes, fees, and financial reforms.”

Salih said domestic borrowing could provide a quick solution to cover salaries and operational expenses, but warned it could reduce liquidity in banks, increase local financing costs, and weaken funding for the private sector.

He added that foreign borrowing could provide dollar liquidity and help maintain monetary stability, but would likely come with reform conditions and increase debt-servicing burdens.

“Boosting non-oil revenues is the most strategic option in the medium and long term,” Salih said, pointing to tighter controls at border crossings and customs points, automation of the tax system, reducing the informal economy. and improving revenue collection “without harming economic activity.”

He also said implementing Iraq’s Integrated Financial Management Information System (IFMIS) would strengthen financial oversight, reduce waste and corruption, and improve the efficiency of public spending management.

Salih stressed that reforming Iraq’s banking sector, particularly the state-run Rafidain Bank and Rasheed Bank, was necessary to improve development financing, digital banking services, and credit systems.

He added that reforming private banks would help expand financial inclusion, support small and medium-sized businesses, and attract investment.

“The current crisis represents a real test for Iraq’s oil-dependent economic structure,” Salih said, adding that accelerating financial and banking reforms and diversifying the economy would strengthen the country’s ability to withstand geopolitical and economic shocks.