DUBAI, UAE - An Iraqi economic expert warned that a potential closure of the Strait of Hormuz could severely damage Iraq’s economy and stop the payment of civil servant salaries.

Israel on Friday launched a comprehensive strike on Iran, targeting its nuclear facilities and killing dozens of high-ranking military leaders, which prompted a retaliatory campaign by the Iranian regime that has seen the two countries trading fire for the past six days and targeting civilian infrastructure as well as military targets.

Haider al-Sheikh, a specialist in economic affairs, told The New Region on Wednesday that the escalating conflict between Iran and Israel has not yet affected trade in Iraq, despite ongoing exchange of fire between the two sides.

Amid the ongoing escalations, reports have circulated in recent days that Iran might be considering closing the Strait of Hormuz to pressure its Western foes. Tehran has made similar threats in the past without acting on them.

“There are global fears about the closure of the Strait of Hormuz,” Sheikh said. “Shutting it down would stop global trade, especially in energy. Iraq depends on oil revenues, which make up 93 percent of the federal budget.”

He added that the ongoing conflict, coupled with a potential US military intervention, could increase the risks to Iraq.

Sheikh explained that such a closure would block Iraq’s oil exports, more than 3.5 million barrels per day, worth over $6.5 billion monthly. “This would paralyze Iraq’s economy and directly affect civil servant salaries,” he said.

However, he noted that as of now, six days into the war, Iraq has not experienced any economic harm. Oil exports are continuing, oil prices have risen above $75 per barrel, and trade with Iran remains active.