Iraq’s Oil Revenue Volatility and the Absence of Legal Protection: Lessons from the 2026 Strait of Hormuz Crisis On February 28, 2026, war erupted in the region, and within days, the Strait of Hormuz was closed, disrupting the only maritime outlet for Iraqi oil exports from the ports of Basra. A few months later, public-sector salaries were delayed, the fiscal deficit widened, and the government raised the official exchange rate of the US dollar. This was not Iraq’s first crisis of this kind, as similar crises had occurred in 2014 and 2020. However, the 2026 crisis exposed one fundamental reality more clearly than ever before: Iraq remains vulnerable to oil market fluctuations without an adequate legal framework to protect its public finances from their consequences.