Iraq possesses significant oil reserves, making it one of the world's largest oil producers and exporters. Oil exports contribute a substantial portion of the country's revenue and foreign exchange earnings. However, Iraq's economy remains heavily dependent on oil exports, which exposes it to fluctuations in global oil prices. Iraq has faced numerous economic challenges, including the aftermath of decades of wars, economic sanctions, political instability, corruption, and inadequate infrastructure. These factors have hindered the country's economic diversification, private sector development, and overall economic growth.

The Iraqi economy is heavily dependent on oil, in other words, it is based on the oil economy. About 95% of Iraq's total oil revenues come from the sale of Iraqi oil. Numerous wars in Iraq and long-term international sanctions have left the Iraqi economy behind. The Iraqi oil sector is facing technical challenges in the production, transportation, and storage of Crude oil and Petroleum products, according to Special Observers for Iraq Reconstruction. It also faces problems such as managing prices and imports, combating smuggling and corruption, improving budget allocation and implementation, and maintaining oil operations. Oil production in Iraq has not yet reached pre-US levels.

Iraq has recognized the need for economic diversification to reduce its dependence on oil and promote sustainable growth. Efforts have been made to develop sectors such as agriculture, industry, tourism, and non-oil exports. However, progress in diversification has been limited, and the oil sector continues to dominate the economy. Iraq faces significant unemployment and underemployment, particularly among the youth population. Job creation and improving living standards remain critical challenges. The government's ability to address social and economic inequalities, provide essential services, and create employment opportunities is crucial for long-term stability and development.

The economic structure of Iraq, like all the countries of the Persian Gulf‎, is based on the production and sale of oil. Iraq is the third-largest oil producer in the world, and the cost of producing oil in that country is the lowest cost of producing oil in the world. During the year, revenues from crude oil exports accounted for the percentage of GDP and the percentage of government revenues. This year, Iraq became the 15th largest oil producer in the world due to the war and the blows caused by the occupation, as well as the consequences of international sanctions and the wars of the Ba'athist regime.

Iraq engages in international trade, primarily exporting oil and petroleum products. The country imports a wide range of goods, including machinery, consumer goods, and Food products. Iraq's trade balance is heavily skewed towards imports, resulting in a trade deficit. Iraq has received international assistance and support from multilateral organizations, such as the International Monetary Fund (IMF) and the World Bank, to address economic challenges, implement reforms, and promote sustainable growth. These efforts have included initiatives to strengthen governance, improve public financial management, and enhance the business environment.

The Iraqi economy has been severely weakened by more than a decade of economic sanctions and war and needs investment and modernization. According to reports, the long-term and major reconstruction of Iraq will cost more than a few billion dollars, of which at least a third will be allocated to the oil, gas, and electricity sectors.

In the current situation, the Iraqi people are in a very bad economic situation, and the Iraqi government is not able to meet their basic needs and create jobs for them, and now the unemployment rate in Iraq is official / percent. At the same time, the Iraqi Minister of Commerce has announced that the national unemployment rate and the low unemployment rate in this country are between up to one percent, and the Iraqi Minister of Labor and Social Affairs announces this figure as more than one percent. The conditions of war and sectarian strife have displaced more than four million Iraqis, making the economic situation more critical.

Iraq has undertaken extensive reconstruction efforts to rebuild its infrastructure, particularly after the defeat of ISIS. The government has sought foreign investment in sectors such as energy, construction, telecommunications, and transportation to support economic development and job creation. However, challenges such as bureaucratic hurdles, security concerns, and corruption have impacted the pace of investment and reconstruction. Iraq's fiscal situation has been strained due to its heavy reliance on oil revenues, which are vulnerable to price volatility. Government spending, particularly on public sector salaries, pensions, and subsidies, has strained the budget. Fiscal deficits and a high public debt-to-GDP ratio have necessitated efforts to diversify revenue sources and reduce expenditures.