ERBIL, Kurdistan Region of Iraq – Iraqi Foreign Minister Fuad Hussein on Saturday said that Baghdad has resorted to printing cash 25 percent more than its actual financial capacity amid a drop in revenues due to the Iran war, warning that a financial catastrophe awaits Iraq if the conflict continues until the end of the year.

The US-Israel war on Iran and the subsequent restrictions on the Strait of Hormuz have greatly impacted Iraq’s income generation, which heavily relies on oil exports, sparking fears that the country would face a financial crisis and fail to provide monthly salaries to its civil servants.

In a televised interview with al-Sharqiya TV, Hussein said that Iraq’s money printing has gone up from 100 trillion to 125 trillion dinars to combat the current financial challenge, but stressed that this is not a viable long-term solution.

“We cannot solve our problems through printing, that would lead to inflation,” said the Iraqi foreign minister. “When it comes to paying salaries, we depend on what we have in reserves, but there are no revenues.”

Iraq exported nearly 100 million barrels in February before the US-Iran war started, generating $6 billion. That 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.

“If the war continues until the end of the year, it would be a catastrophe for us,” he stated, adding that Baghdad is seeking to increase oil exports in the coming period, but noted that such a measure would only resolve part of the problem and that the real solution lies in strengthening ties with Gulf and Western countries to obtain financial assistance.

The regional turmoil has forced Iraq to explore northern routes in a scramble to sell more oil, such as Turkey’s Ceyhan port. It has also compelled Baghdad to explore land routes westward through Syria.

During his first meeting as Iraq’s new finance minister, Falih al-Sari stressed the need to increase revenue from the ministry’s non-oil sources amid the decline in the country’s oil exports. The newly appointed minister called for “maximizing public revenues in the bodies and departments affiliated with the ministry.”

The drop in Iraqi exports, currently by a full decimal point compared to pre-war times, is particularly detrimental as Baghdad relies heavily on oil for around 90 percent of its annual budget.