As the American-Israeli conflict with Iran enters its fourth week, Iraq is increasingly feeling the effects of the war, particularly during the culturally significant Eid al-Fitr. Trade centers in major cities have seen a marked decline in activity, with merchants disappointed as the anticipated holiday spending fails to materialize. The economic strain is attributed to the impact of the conflict on oil exports, which rely heavily on the stability of the region.

Iraq's economy is heavily dependent on oil exports, accounting for over 90% of its annual state budget, and government salaries and expenses consume about 65-70% of that budget, according to economic adviser to the Iraqi Prime Minister. The conflict has resulted in significant disruptions, notably the halt of navigation in the Strait of Hormuz, vital for transporting about 20% of the world's oil, further complicating Iraq's ability to export its crude oil at a rate of approximately 3.6 million barrels daily. This disruption has raised concerns about the financial health of the Iraqi treasury.

Consequently, Iraqis are facing fears of a tighter financial situation leading to a potential inability to meet their salaries. The lack of oil export capabilities over the past two weeks has heightened these fears as citizens are already attempting to adapt by limiting their expenditures during what is typically a festive time of year. The overall sentiment in Iraq is one of anxiety as residents brace for the possible long-term economic implications of the conflict and what it may mean for their livelihoods during festive occasions such as Eid al-Fitr.