AGP Executive Report

US-Iran Diplomacy: Pakistan’s army chief Asim Munir arrived in Tehran as both sides signal “slight progress” on talks aimed at ending the April ceasefire stalemate and easing Gulf energy bottlenecks. Iraq Budget Pressure: With oil exports collapsing amid Hormuz disruption, Iraq is preparing an emergency $9.5bn-a-month financial gap plan—mixing domestic and foreign borrowing plus a push for higher non-oil revenues. KRG-Federal Talks: Masrour Barzani is set to visit Baghdad for KRG-Iraqi government talks next week, including electricity reform know-how. US Support for Peshmerga: A new US DoD budget request reportedly cuts Counter-ISIS Train-and-Equip funding for Peshmerga to zero, though Iraq’s Kurdish officials deny any suspension. Energy Risk Spillover: Iraq-linked drone allegations after the UAE’s Barakah nuclear plant attack keep regional security and oil-price nerves high. Environment: Iraq says it produces ~16,000 tons of plastic waste daily and moves to ban free single-use plastic bags within six months.

Oil & Shipping: Oil prices edged up Friday but stayed on track for a weekly drop as investors doubt a US-Iran breakthrough and keep watching Strait of Hormuz risks. Brent rose to about $104 while WTI hovered near $98, with analysts warning the market could stay in a “red zone” in July-August unless Hormuz fully reopens. Iraq Security & Ports: Iraq’s port authority says it mobilized rescue teams after contact was lost with two Bolivia-flagged vessels in the Gulf, noting neither ship entered Iraqi waters. Iraq-UAE Tensions: Iraq is also investigating drone attacks tied to strikes on Gulf infrastructure, including the Barakah nuclear plant. Veterans Policy: In Washington, Democrats pushed to force a House vote on the Major Richard Star Act, aiming to end the “wounded veteran tax.” Background: The week’s dominant theme remains Hormuz pressure—on prices, routes, and regional security—while Iraq tries to manage spillover from the wider Iran conflict.

Smartphone Slowdown: Omdia says the Middle East smartphone market (excluding Turkey) fell 6% YoY to 11m units in 1Q26 as weaker sell-through and cautious consumers trimmed replacement demand, while higher memory costs kept prices elevated. Hajj Under Strain: Saudi expects about 1.5m pilgrims for Hajj (May 25-29) despite the Iran war and heightened security/logistics pressure. Hormuz Energy Shock: The IEA warns oil markets could hit a “red zone” by July-August as stocks erode, Middle East exports stay tight, and demand rises into the travel season—pushing calls for a full reopening of Hormuz. Iraq-UAE Drone Fallout: UAE urged Iraq to stop “hostile acts” from its territory after the Barakah nuclear plant attack, while Iraq says it’s investigating attacks on Gulf states. Kurdistan Tourism Lift: Kurdistan is bracing for an Eid al-Adha surge, with many hotels already heavily booked in Duhok and Sulaimani. Security Threat Signal: ISIS in Syria escalated rhetoric, urging a “new phase of fighting” and attacks on Syrian forces.

Iran-Iraq Cross-Border Fallout: Iraq is facing fresh pressure after a ministerial security probe was ordered into alleged drone attacks on Saudi Arabia and the UAE launched from Iraqi territory, with Baghdad stressing it rejects any use of its land or airspace and warning of legal action if claims are confirmed. Hormuz Disruption, Iraq Oil at Risk: Prime Minister Ali al-Zaidi told oil officials to secure alternative export routes and keep tankers moving as Strait of Hormuz bottlenecks continue to rattle supply and revenues. Negotiations vs. Threats: Trump said Iran talks are “right on the borderline” and could move fast if answers aren’t “100%,” while Iran says it’s reviewing a new U.S. proposal and keeps asset release and lifting naval restrictions as key demands. Regional Economic Spillovers: The Middle East conflict is also hitting far beyond the Gulf—Sri Lanka’s tea workers are cutting meals and switching from gas to firewood as energy costs rise and exports to the region weaken. Iraq Domestic Pressure Points: Iraq recorded over 5,700 domestic violence cases and more than 17,200 divorce cases in early 2026, underscoring mounting social strain as the government tries to stabilize security and the economy.

Memorial Day & Local Life: Americans mark May 25 with ceremonies and tributes, while Ontario extends FIFA World Cup alcohol “last call” to 4 a.m. and keeps LCBO hours longer—small policy moves with big crowd-economy impact. Iraq Environment & Governance: Iraq’s new cabinet approved tighter plastic rules, including bans on free plastic bags in bakeries and limits on imports, plus fees for producers—an early test of the new government’s ability to turn policy into enforcement. Iraq Security & Regional Flashpoints: The Hormuz standoff keeps tightening: Iran warns war could spread beyond the region as transit traffic spikes, and the UAE calls the Barakah nuclear plant attack a “deliberate criminal act,” with IAEA safety concerns front and center. Trade & Logistics: Salalah Free Zone reports strong warehouse demand and new industrial deals, while Iraq’s oil shipping remains hostage to Hormuz disruptions and rerouting. US-Iran Tensions: A fresh U.S. Congress report claims up to 42 aircraft were lost in 40 days—adding fuel to the debate over how the conflict is being fought and how it’s evolving.

Iran Crisis Escalation: Trump says he was “an hour away” from ordering fresh strikes on Iran, then paused again as Tehran pushes a new peace proposal; US VP JD Vance calls talks making “good progress” while warning Washington is “locked and loaded” if no deal lands in days. UAE-Iraq Drone Fallout: The UAE says drones hit near the Barakah nuclear plant and that the launches came from Iraq; Russia and other UN Security Council members condemned the strike, while Baghdad denies any plan to reroute border traffic via Syria. Kurdistan Security Funding: US officials urged continued Peshmerga support amid a 2027 budget proposal that would cut direct funding and training. Sanctions Pressure: The US Treasury added 50+ Iran-linked designations, while Adani Enterprises agreed to a $275m settlement over alleged Iranian LPG imports. Iraq Trade & Borders: Iraq rejected/destroyed 3,550 tons of imports at Ibrahim Khalil for failing Iraqi/KRG standards, and a Turkey-to-Iraq convoy via Syria raised questions about shifting routes. Oil & Markets: With Hormuz risk still driving prices, the week’s big theme remains energy disruption and the threat of renewed conflict.

Iran-U.S. Flashpoint: Trump says he was “an hour away” from ordering fresh strikes on Iran, then paused again, warning a new attack could come within days if talks fail—while Iran counters that it could “open new fronts” if the U.S. resumes aggression. Diplomacy vs. Deadlines: The standoff hinges on a new Iranian peace framework—sanctions relief, asset releases, reparations, and U.S. troop withdrawal—yet Washington still presses nuclear and regional demands. Gulf Energy Pressure: With Hormuz risk still hanging over markets, the UAE and others are accelerating bypass infrastructure, including new pipeline plans aimed at cutting dependence on the strait. Iraq Domestic Watch: In Basra, protests at the $3.75B FCC refinery project continue as former workers demand Oil Ministry jobs; in Najaf-Erbil talks, officials push water, transport, housing, and direct flight links. Cybercrime Crackdown: Interpol reports a MENA operation arresting 201 people tied to phishing and malware, including participation from Iraq.

Iran-US Brinkmanship: Trump says he’s holding off a planned Tuesday attack on Iran after Gulf allies asked for more time, claiming “serious negotiations” and a “very good chance” of a deal that would leave Iran without nuclear weapons—while also warning the US is ready for a “full, large scale assault” if talks fail. Hormuz Shockwaves: Even with daily traffic near-halted, Bloomberg reports most large non-Iranian tankers that entered the Persian Gulf during the war have managed to exit with cargo, showing a risky “few ships” workaround. UAE Energy Diversification: The UAE is fast-tracking a West-East pipeline to double crude export capacity via Fujairah by 2027, reducing reliance on the Strait of Hormuz. Iraq Money Pressure: Iraq’s oil ministry says April exports brought just over $1.087bn, down sharply from earlier months as Hormuz disruption bites. Iraq Domestic Tension: Thousands of Iraqi graduates protest across provinces and Baghdad, demanding jobs and an end to clientelism as unemployment remains high. Sanctions Fallout: US Treasury reached a $275m settlement with Adani Enterprises over alleged Iran-linked LPG shipments, while US DOJ dropped related fraud charges.

Hormuz Shockwaves: Oil markets are still jittery as the Strait of Hormuz disruption drags on, with the IEA warning inventories are being depleted fast and only a few weeks of buffer remain—raising the odds of more price swings into peak summer demand. Iraq Trade Snapshot: Iraq posted a $24.7bn trade surplus for 2025, with exports ($90.43bn) outpacing imports ($65.74bn), though the numbers still underline how tightly Iraq’s balance depends on oil flows. Gulf Security Flashpoints: A drone attack near the UAE’s Barakah nuclear plant sparked fresh escalation fears, while Iran claims strikes in northern Iraq and Israel reports covert bases in the Iraqi desert—keeping the region on edge. Iraq Development Push: Iraq and UNDP signed a deal to back investment and infrastructure, targeting education, water resilience, agriculture value chains, and private-sector participation. Local Economy Pressure: More than 5,000 unemployed graduates marched in central Baghdad demanding public-sector jobs, highlighting how reform plans collide with hiring limits.

Strait of Hormuz shock hits Iraq’s oil lifeline: Major shipping lines say they’ve found partial workarounds as the corridor stays effectively constrained, but land routes can’t replace sea capacity—trade flows to the Persian Gulf are down sharply. Oil prices jump on Iran risk: Brent pushed above $111 and WTI rose as Trump weighs renewed military options and Iran warns the Gulf of Oman could become a “graveyard” for US ships. Iraq exports fall hard: Iraq’s new oil minister says April exports via Hormuz were just 10 million barrels, with tankers staying away over insurance; Baghdad is pushing to lift exports via the Kirkuk–Ceyhan pipeline and talks with Ankara. Baghdad turns to revenue: Iraq’s finance minister urges maximizing non-oil income as oil receipts slide. Security and politics at home: Iraq’s new PM Ali al-Zaidi faces fresh conflict-of-interest allegations, while Al-Kadhimiya’s Imam al-Jawad commemoration drew millions with a “weapons-free city” plan. Regional spillover: A drone fire near the UAE’s Barakah nuclear plant adds to supply fears.

UAE-Iran Tensions Spike: A drone strike started a fire near Abu Dhabi’s Barakah nuclear plant, hitting an electrical generator outside the facility’s inner perimeter; authorities say there was no radiation impact and investigations are ongoing. Baghdad Pilgrimage Logistics: Iraq moved 4.06M+ pilgrims through Al-Kadhimiya for Imam Al-Jawad’s commemoration, with a “weapons-free city” plan and no major security incidents reported. Iraq Politics Under Scrutiny: A former MP filed a conflict-of-interest complaint against Prime Minister Ali al-Zaidi and Electricity Minister Ali Saadi Wahib, demanding financial disclosures. Power Crunch Focus: Iraq’s new electricity minister vowed to end decades-long shortages on day one. Hormuz Pressure on Trade: With Hormuz risk rising, Gulf transit is shifting toward pipelines and rail, while Iraq’s oil exports through Hormuz reportedly fell to about 10M barrels in April. US-Iran Brinkmanship: Trump warned Iran the “clock is ticking” as talks hang in the balance.

Iraq’s new government takes shape: Prime Minister Ali al-Zaidi has formally taken office and moved fast—appointing an acting interior minister to keep the ministry running while coalition talks drag on, and chairing the first Financial Stability Council meeting hours after launching it, with a push for tighter fiscal discipline, anti-money laundering steps, and non-oil revenue growth. Security and regional pressure: Baghdad is under mounting US-Iran pressure as it tries to complete a partial cabinet and manage the militia question. Digital crackdown: Iraq’s Communications and Media Commission urged TikTok to comply with Iraqi law and tackle alleged money-laundering-linked accounts. Trade and energy squeeze: Iran exported about $148M in goods to Iraq via Kermanshah crossings in March-April, while Iraq’s oil exports through Hormuz plunged—down to 10 million barrels in April—as tanker insurance and war risks choke shipments; Baghdad is leaning on the Kirkuk–Ceyhan pipeline and talks with Ankara to raise export capacity. Language policy in Erbil: Erbil ordered commercial signs to include Kurdish writing, aiming to curb the spread of foreign-language signage.

Power Transfer & Reform Drive: Iraq has officially handed power to new PM Ali al-Zaidi, who immediately pledged a “comprehensive” economic reform plan and a tougher anti-corruption push after parliament approved 14 of 23 minister posts. Oil Shock from Hormuz: Iraq’s oil minister Basim Mohammed Khudair says exports via the Strait of Hormuz collapsed to 10 million barrels in April (from ~93 million monthly pre-war), blaming war-linked disruption and tanker insurance. Route Shift to Turkey: Baghdad says Kirkuk crude is now moving through the Kirkuk–Ceyhan pipeline, exporting about 200,000 bpd with a plan to raise it to 500,000 bpd, while talks with Ankara and US firms (including Chevron and ExxonMobil) aim to expand capacity. Regional Security Pressure: The wider Iran conflict keeps oil markets jumpy, with prices up more than 3% as US-Iran rhetoric dents hopes for a Hormuz deal. Global Spillover: A Suezmax tanker carrying Iraqi crude has been seen approaching India after Hormuz transit, underscoring how limited, risky crossings are still happening.

Militia Terror Charges: U.S. prosecutors unsealed charges against an Iran-backed Iraqi militia commander, Mohammad Baqer Saad Dawood al-Saadi, alleging he plotted nearly 20 attacks across Europe and Canada and coordinated plans targeting U.S. and Jewish sites, including a synagogue in New York. Humanitarian Aid: Ayatollah Al-Sistani’s Lebanon office says expanded relief has reached more than 74,000 displaced families, with cash and medical support mechanisms used during the crisis. Energy Shock in Iraq: An oil spill in Kirkuk’s irrigation canal is contaminating agricultural water, raising fears for crops, livestock, and long-term soil and health damage. Oil Prices & Hormuz Risk: Oil jumped more than 3% as U.S.-Iran tensions dent hopes for a deal to reopen the Strait of Hormuz, where about a fifth of global LNG and oil trade normally passes. Digital Football Push: Google’s Gemini is moving from sponsorship into fan experience for Iraq and Morocco’s national teams, aiming to make AI interactive rather than just promotional.

IMF Talks: Iraq has reportedly approached the IMF for emergency financing tied to the Iran war’s economic shock, with discussions ongoing on size and loan structure after spring meetings in Washington. Oil Under Pressure: To keep exports moving through the Strait of Hormuz risk zone, Iraq is cutting May crude prices by up to $33 a barrel, shifting shipment risk onto buyers via contracts that remove force majeure. Gulf Bypass Race: The UAE is fast-tracking a West–East pipeline to double export capacity via Fujairah by 2027, underlining how Hormuz disruptions are reshaping regional energy logistics. Politics at Home: Iran’s president congratulated Iraq’s new PM Ali al-Zaidi after parliament approved his government, while key cabinet posts remain in negotiation. Shipping Reality Check: Strait traffic stays thin, with only a handful of tankers successfully crossing amid heightened tensions.

IMF Warning: The IMF says the Iran war is pushing the global economy toward its “adverse scenario,” with growth sliding and inflation risks rising as Strait of Hormuz disruptions keep oil prices elevated. Iraq Politics: Iraq’s new PM Ali al-Zaidi was sworn in with a partial Cabinet after lawmakers deadlocked on key posts like interior and defense, while the government also faces fresh US pressure over weapons and non-state groups. Energy Pressure: Iraq is cutting oil prices sharply to keep exports moving despite Hormuz risk, shifting more shipment risk onto buyers. Shipping Signal: A Chinese supertanker carrying Iraqi crude reportedly cleared Hormuz as Trump and Xi pressed for the strait to stay open. Business Watch: The IMF also welcomed early Trump-Xi dialogue as a stabilizer for trade tensions, but warned the Middle East conflict is still weighing on the outlook.