AGP Executive Report

Oil & Trade Shock: OPEC+ is set to meet as the Strait of Hormuz remains largely shut, with analysts warning any quota hikes won’t quickly fix prices after the Iran war choked Gulf crude shipments. Iraq Fiscal Pressure: Iraq printed 25 trillion dinars to shore up finances as oil revenues fall, with officials warning continued Hormuz disruption could trigger a “financial disaster” and threaten salary payments. Non-Oil Revenue Push: Iraq plans to raise non-oil revenues to 46% under an “Iraq 2035” agenda aimed at diversifying the economy and stabilizing budgets. Infrastructure Investment: The World Bank approved $900 million to upgrade Iraq’s road network, targeting safer transport corridors and jobs. Baghdad vs Erbil Money & Trade: Erbil and Baghdad are set for renewed talks over financial disputes, including ASYCUDA customs implementation and a dollar access/embargo dispute affecting Kurdistan traders. Anti-Corruption Drive: Analysis highlights the tough work facing PM Ali Al Zaidi in curbing corruption while balancing US demands and ties with Iran. Oil Export Claims: Iraq’s Oil Ministry denies US forces detained tankers over alleged payments to Iran for Hormuz transit. Business & Banking: The PM says business leaders and private banks will join an upcoming US visit, and Baghdad plans a development fund backed by a $10bn Central Bank contribution. Health Sector: Iraq will add a clause in the 2027 budget to appoint contract resident doctors and raise salaries after protests.

Kurdistan–Baghdad Talks: A KRG delegation led by Omed Sabah is set to visit Baghdad within 48 hours to discuss financial disputes, including ASYCUDA customs implementation and the dollar access squeeze on Kurdish traders. Oil Export Claims: Iraq’s National Security Advisor Qasim al-Araji and the government denied reports that Iraq pays Iran transit fees for Hormuz passage, stressing exports move via internationally recognized routes and warning against unverified claims. Militia Disarmament: US and Western officials welcomed Asaib Ahl al-Haq and Kataeb Imam Ali moves to hand weapons to state control, framing it as a step toward stronger Iraqi sovereignty. Safety Crackdown: Iraq’s civil defense says it closed about 11,000 buildings over the past year for fire and construction violations, with Anbar leading the closures. Legal Push for Reparations: Economist Nasser Al-Kinani urged Iraq to rejoin the ICC to pursue an estimated $5 trillion in 2003-invasion damages. Business & Telecom: Zain highlighted sustainability integration in its strategy, while Korek Telecom faced shutdown steps after a contract dispute.

World Bank Funding: The World Bank approved a $900m project to upgrade Iraq’s road infrastructure, aiming to strengthen transport corridors, cut travel times, improve safety, and boost trade and access to services across regions including Baghdad, Kurdistan, and border routes with Jordan, Syria, and Türkiye. Energy & Power Shortages: With Iraq’s grid still unreliable and summer blackouts looming, families are increasingly looking at rooftop solar as a practical hedge against generator costs and outages. Kurdistan-Türkiye Talks: Kurdistan Region President Nechirvan Barzani met Turkey’s ambassador to Iraq to discuss security, internal political disputes in the region, and ways to deepen economic and trade cooperation, including the need for better Erbil-Baghdad dialogue. Iraq Currency Reality: A new report highlights why Iraqis and others under currency pressure increasingly turn to the US dollar when local money loses purchasing power and confidence. Regional Security Pressure: As Iran-U.S. tensions persist, an Iranian official says a potential deal depends on releasing $24bn in frozen Iranian assets, underscoring how finance and sanctions remain central to regional business risk. Maritime Risk: Multiple reports point to heightened shipping and port security concerns around Iraq amid projectile incidents and wider Gulf instability.

World Bank Infrastructure Push: The World Bank approved a $900m package to upgrade Iraq and Kurdistan road networks, targeting key corridors linking Baghdad to Turkey (E1) and Syria/Jordan (E2) to cut transport bottlenecks and improve safety; roads carry over 90% of Iraq’s transport volume but many are in moderate-to-poor condition, with about 7.9m people expected to benefit. Oil & Trade Pressure: Iraq’s crude exports averaged about 329,000 bpd in May, with Hormuz-linked shipments still constrained and volumes partly offset via the Kurdistan-Ceyhan pipeline, leaving revenues around $1bn and exports far below pre-crisis levels. Fuel Shortage Crackdown: Iraq’s Integrity Commission deployed field teams to monitor gasoline distribution at Baghdad filling stations and curb smuggling/manipulation, checking deliveries versus sales and focusing on both regular and premium supply flows. Regional Security Alerts: The U.S. Embassy in Jerusalem reiterated Level 4 travel cautions for Iraq and neighboring states amid “high tensions,” urging Americans to monitor local media and know shelter locations. Maritime Blockade Workarounds: Reports say Iran is increasingly using Iraq’s Umm Qasr port as a logistics hub to route cargo toward Iran while the U.S. blockade tightens.

Iraq’s State Arms Push: An influential Shiite militia, Saraya al-Salam, handed weapons to the Iraqi Army in Samarra as Prime Minister Ali al-Zaidi drives a wider plan to bring armed groups under state control, though other factions remain resistant. Kurdistan Oil Operations: Iraq ordered Kurdistan oil companies to resume operations, with officials also pointing to efforts to restart exports and keep supply moving amid regional disruption. Gasoline Pressure in Baghdad: A reported gasoline shortage has revived Iraq’s black market, highlighting how supply disruptions and foreign firm pullouts can quickly hit household costs. Anti-Corruption Clampdown: Iraq’s anti-corruption drive intensified after the arrest of a deputy oil minister over allegations tied to large sums of cash, gold, and weapons. Parliament Formation Update: Iraq’s Coordination Framework is pushing for an extraordinary parliamentary session to complete cabinet voting on remaining vacant posts, including key security ministries. Business & Markets: ShaMaran Petroleum announced its first day of trading on Euronext Growth Oslo, underscoring continued investor interest in Kurdistan-linked energy assets. Travel Risk Alert: The U.S. issued updated security advisories for Iraq and the wider Middle East as Iran-linked tensions keep volatility high.

Iraq’s State Arms Push Faces Resistance: Baghdad’s drive to centralize weapons under state authority may stall as hardliners link disarmament to a US troop exit, raising uncertainty for Prime Minister Ali Al Zaidi’s plan and US-backed “order” efforts. Kurdistan–Turkey Economic Talks: Kurdistan President Nechirvan Barzani and PM Masrour Barzani met Turkey’s ambassador, stressing stronger trade ties and continued oil exports via Turkey’s Ceyhan port, as regional disputes with Baghdad remain a key focus. Development Road Moves Forward: Iraq plans to start implementing the $17bn Development Road corridor, linking Basra’s al-Faw Grand Port to Turkey with rail, roads, energy and telecom links to boost Asia-Europe transit. Basra–Iran Border Gateway: Basra will open its largest border crossing with Iran next week, ahead of Muharram, with a 36-km Shalamcheh railway corridor and compensation/relocation for affected homes and facilities. Currency Watch: The US dollar exchange rate stayed steady in Baghdad and Erbil, with shops trading roughly around 1,542.5–1,532.5 dinars per dollar. Regional Trade Pressure: Iraq–Jordan trade fell 30% in Q1 2026, underlining how regional instability is hitting cross-border commerce.

Militia Arms Control: Iraq’s PM Ali al-Zaidi is moving to bring weapons under state control, but factions are signaling resistance—Saraya Awliya al-Dam says it won’t disarm unless Baghdad guarantees full sovereignty and ends foreign military presence, while other groups have already announced steps to break from the Popular Mobilization Forces. Communications & Telecom: Iraq’s Communications and Media Commission suspended Korek Telecom operations and canceled its contract, with the company’s CEO calling the decision “unlawful” and saying it will pursue legal action. Oil & Trade Logistics: With Hormuz disruption and regional tensions, Iraq is pushing alternative export routes and ramping pipeline output, including plans to boost crude exports via Ceyhan as southern output climbs. Forced-Labour Tariffs Watch: The U.S. Trade Representative proposed Section 301 duties on imports from 60 economies over forced-labour enforcement failures, explicitly listing Iraq among the countries flagged. Security & Shipping Risk: Reports claim IRGC-linked attacks on MSC vessels near Iraq, raising risks for maritime trade and insurance costs in the Gulf. Regional Repression: Bahrain arrested 20 figures including Shia scholars and banned Shia pilgrimages to Iraq and Iran ahead of Muharram, underscoring wider sectarian pressure across the region.

Kurdistan Oil Restart: Iraq ordered oil companies in the Kurdistan Region to resume operations from Thursday after drone-linked shutdowns, as Baghdad tries to offset Strait of Hormuz disruptions and protect revenues. Alternative Exports Push: The cabinet approved plans to more than triple crude exports via the Kurdistan–Turkey pipeline to Ceyhan, targeting up to 770,000 bpd within about two and a half months, while Iraq also races to expand other export routes. Southern Output Recovery: Iraq restarted key fields including West Qurna 1 and Majnoon, lifting output to roughly 1.5–1.6 million bpd, as Hormuz closure keeps exports constrained. Militia Weapons Under State Control: PM Ali al-Zaidi moved to form a joint committee to develop mechanisms for disengaging PMF factions and consolidating weapons under state authority, amid skepticism about whether Iran-backed groups will fully comply. Telecom Contract Clash: Korek Telecom’s CEO called Iraq’s CMC decision to cancel its contract and suspend operations “unlawful,” vowing legal action after the regulator cited alleged breaches. Maritime Risk in Iraq: MSC confirmed its MSC Sariska V was hit by two projectiles near Umm Qasr; the firm said all crew were safe and condemned the attacks as unjustified. Trade & Tariffs Watch: Separately, the U.S. proposed new Section 301 tariffs tied to forced-labor enforcement failures across dozens of economies, signaling more pressure on global supply chains that affect regional trade.

Iraq Economy Outlook: The EBRD cut its 2026 growth forecast for Iraq by 5.1 points, projecting a contraction of 1.5% as the Middle East war lifts energy costs and disrupts supply chains. Oil & Trade Routes: With Strait of Hormuz risk in focus, Iraq is also moving to expand crude exports via the Ceyhan pipeline, aiming to triple shipments as regional shipping faces pressure. Anti-Corruption Crackdown: Iraq’s judiciary confirmed the detention of Deputy Oil Minister for Refining Affairs Adnan Al Jumaili, citing corruption charges; authorities seized about $10m in cash, billions in assets, and properties tied to refinery contract allegations. Armed Groups & State Control: Iran-backed militias Asaib Ahl al-Haq and Imam Ali Brigades said they are disengaging from the PMF and moving weapons under state control, following calls from Grand Ayatollah Ali al-Sistani. Regional Security Spillover: Reports said Iranian missiles struck a Kurdish separatist base in Erbil, underscoring how Iraq’s northern security remains fragile amid the wider Iran-US confrontation.

Maritime Security & Trade: MSC confirmed its container ship MSC Sariska V was hit by two projectiles off Iraq’s Umm Qasr; UKMTO reported a large explosion and Iraqi officials said one blast may have been from a drone, while MSC denied any affiliation with the US or Israel and said the crew was unharmed. Regional Diplomacy: US President Donald Trump insisted US-Iran talks are continuing “at a rapid pace” despite Iranian media reports of a pause tied to Lebanon, as negotiators weigh a potential interim ceasefire and the future of the Strait of Hormuz. Militia & State Control: Iraq’s Iran-backed Asaib Ahl al-Haq said it is moving to place all weapons under state control, forming a central committee to inventory arms and coordinate with the prime minister and security institutions. Cross-Border Disruption: Bahrain banned citizens from traveling to Iran and Iraq citing ongoing regional security tensions, amid heightened detentions and sanctions-related fears. Iraq Economy & Infrastructure: Iraq’s development agenda also surfaced with reports on airport expansion plans and broader investment/industrial moves, while the week’s shipping risks keep pressure on logistics and trade routes.

Private-Sector Investment Push: Iraq’s planning ministry says the private sector is set to invest about $65bn in the 2024–2028 development plan, covering water, roads, electricity, housing, reconstruction, and economic diversification, including big projects like the Development Road and Grand Faw Port. Cash Economy vs Banking: A new report highlights that 87% of Iraq’s money supply (about 95tn dinars) sits outside the banking system, with exchange and money-transfer offices expanding as traders and households keep relying on cash. Trade Route Upgrade: Iran’s Jilat border crossing with Iraq’s Maysan province has entered the operational phase, with infrastructure work underway and possible partial opening during Arbaeen. Border & Pilgrimage Logistics: The same push to expand land routes comes as Iran looks to boost trade and passenger movement beyond the main crossings. Suicide Spike in Baghdad: Baghdad recorded four suicide deaths in one day, with officials linking cases to psychological and social pressures amid worsening economic strain. Heritage Watch in Tikrit: Saladin antiquities officials say the Al-Bu Ajil Corniche project near Tikrit will not affect the Tell Hatra archaeological mound, urging the public to ignore misleading social media claims. World Cup Returns to Iraq: Iraq named its final 26-player World Cup squad after a 40-year absence, aiming for a disciplined, fast-transition style. Shipping Risk in the Gulf: UK maritime authorities reported an explosion near Umm Qasr, while Iran’s IRGC claimed it targeted the container ship MSC Sariska V, underscoring how regional tensions keep disrupting trade routes.

Maritime Security: A cargo ship near Iraq’s Umm Qasr was hit by an unidentified projectile and suffered a large explosion, with UKMTO reporting the blast about 40 nautical miles southeast of the port; Iraqi officials later said a second blast may have come from a drone, and no casualties or environmental damage were reported as investigations continue. Iran-US Diplomacy: Iran has halted indirect talks with the US via mediators, citing Israel’s deeper Lebanon operations against Hezbollah; Iranian officials warn ceasefire violations on one front mean violations on all fronts, while Trump says he hasn’t been told talks are suspended and is willing to wait. Energy & Trade Risk: Reports tied to the Lebanon escalation also raise fears of renewed pressure on major shipping chokepoints, including the Bab al-Mandeb and Strait of Hormuz, with oil prices jumping after the latest developments. Iraq Investment & Housing: TMG secures an Iraqi investment licence for an $18.8bn mixed-use mega community in southwest Baghdad, targeting about 43,000 homes and broad commercial and social facilities. Remittances: Iraq’s wider region sees support from migrant money flows, with remittances topping $3bn for a sixth month in Bangladesh—an indicator of how Gulf-linked labor markets keep feeding household spending.

Iraq’s Integrity Push Under Fire: Iraq’s new anti-corruption council led by PM Ali Al-Zaidi is being challenged as unconstitutional, with an MP saying oversight bodies should not be headed by the prime minister. Militia De-escalation Signals: Muqtada Al-Sadr reportedly dissolved ties with Saraya Al-Salam, framing it as a move to ease pressure on Iraq amid scrutiny of armed groups and possible reintegration of members into state forces. Anti-Corruption & Media Scrutiny: An Iraqi influencer in Nineveh was arrested over questions about who funded social media giveaways, as authorities focus on financing behind prize promotions. Everyday Costs Rise: Mechanics across Iraq link poor gasoline quality to more vehicle breakdowns and higher repair bills, citing problems like engine knocking and reduced performance. Regional Diplomacy With Iraq in the Mix: The US expanded special envoy Tom Barrack’s role to cover Syria and Iraq, as Washington signals deeper coordination with both governments.

Food Security & Trade: Iraq’s Ministry of Trade says a shipment of 44,000 tons of US rice reached Jordan’s Aqaba Port for delivery to Iraq, as regional shipping disruptions continue. Diplomacy & Investment: Prime Minister Ali Al-Zaidi met US Chargé d’Affaires Joshua Harris, reaffirming cooperation under the Strategic Framework Agreement, with talks also covering economic, investment and cultural ties. Anti-Corruption Drive: A Karbala provincial council member alleges corruption and waste in local projects and state land allocations, while Baghdad moves to tighten spending and recover public funds through a new integrity and oversight council. Press Freedom: Iraq’s CMC suspended TV programs, fined outlets and restricted media figures, with a press freedom group calling the actions unconstitutional and urging stronger legal protections. Oil & Sanctions: The US Treasury extended a license for firms to keep negotiating with Russia-based Lukoil over asset sales tied to the West Qurna-2 field, a major Iraq producer. Power & Infrastructure: Iraq restarted electricity interconnection lines with Iraqi Kurdistan, adding 120 MW to the national grid. Logistics Bottlenecks: Iraq’s Hormuz-linked shipping constraints are pushing exports onto overland tankers, but red tape and security clearance delays are slowing tanker loading and cutting volumes. Public Backlash: A major protest erupted in Baghdad’s Radwaniyah over a decree to hand airport-adjacent state land to foreign developers, with residents alleging corruption and bribes.

Iraq Telecom & Digital Access: Iraq’s Ministry of Communications says it will launch free internet at holy shrines and major religious sites starting next week for Eid al-Ghadir, with service running every Thursday and Friday around Najaf, Karbala, Kadhimiya and Samarra, and expanding during Ashura and Arbaeen across key pilgrimage routes. US-Iran Financial Pressure: The U.S. seized about $1 billion in Iranian-linked cryptocurrency under an Operation Economic Fury push to cut Tehran’s funding channels, while also citing sanctions and action tied to Iraqi oil facilitation by an Iran-linked official. Regional Security & Trade Risk: UN nuclear chief Rafael Grossi warned of a growing “pattern” of attacks on nuclear power plants, pointing to a drone strike from Iraq that hit a generator at the Barakah plant in Abu Dhabi. Diplomatic Continuity: U.S. Secretary of State Marco Rubio said Syria envoy Tom Barrack’s formal mandate is expiring, but he will keep a leading role covering Syria and Iraq policy. Iraq Militia Politics: “Ashab al-Kahf” urged Prime Minister Ali Al-Zayidi to release its detained fighters, framing the demand as resistance to “occupation” pressure.

Iraq Budget Pressure: Iraq is scrambling to balance its 2026 budget as oil exports plunge after Strait of Hormuz disruptions, cutting monthly revenue from about $6bn (February) to under $1bn (April), pushing Baghdad to seek northern routes and tighter fiscal control. Oil & Trade Bottlenecks: With Hormuz freight bottlenecks squeezing supply chains, Iraq’s construction sector faces added strain as shipping constraints ripple through costs and delivery times. Oil Minister Update: Iraq appointed an industry veteran as its new oil minister, signaling a push to stabilize production and exports amid regional turmoil. Kurdistan Pay Gap: The KRG says Baghdad has underfunded Kurdistan salaries by roughly $60m, adding pressure to regional finances. Anti-Fraud Crackdown: Iraq says it foiled a massive 1.5tn dinar fraud attempt on state banks and is probing major state contracts in a broader corruption drive. Regional Investment Watch: Syria’s post-war reconstruction pitch is drawing investor interest, but sanctions and political risk remain major hurdles—important for Iraq-linked regional trade and logistics. US-Iran Deal Drift: Negotiations for a ceasefire extension and nuclear talks remain close but not finalized, keeping energy and shipping uncertainty high for Iraq’s economy.