The math behind the draft budget relies on crude exports reaching 4 million barrels per day. Even if this production volume holds, the $58 price point falls drastically short of the $92.43 breakeven price estimated by the International Monetary Fund for 2025. Baghdad is now weighing a devaluation of the dinar, potentially shifting the exchange rate to between 1,400 and 1,500 per dollar, to stretch its oil revenue further. While this move would increase the local-currency value of export earnings, it threatens to push the cost of imported goods significantly higher.

Baghdad remains tethered to oil for the overwhelming majority of its state revenue, making the economy highly sensitive to export disruptions. Recent geopolitical tensions near the Strait of Hormuz forced a costly logistical pivot, rerouting shipments toward Turkey and planning for long-term alternatives via Syria and Jordan. Despite these vulnerabilities, the government maintains a target to expand production to 10 million barrels per day within six years. For now, the 2027 budget highlights a stark reality: the current spending trajectory requires either a sustained surge in oil prices or a radical expansion of export capacity that remains years away.