AGP Executive Report

Anti-Corruption Crackdown in Baghdad: Iraqi security forces sealed off the Green Zone and carried out raids early Sunday, targeting “several politicians” and lawmakers over financial and administrative corruption, with Counter-Terrorism Service units and judicial arrest warrants; reports said at least eight people were arrested, including MPs, as the new PM Ali al-Zaidi pushes a state-wide integrity drive. Green Zone Raid Details: AFP footage showed heavy vehicles and raids inside compounds and homes, while entrances were closed and checkpoints tightened, with students reportedly allowed through using exam cards. Iraq-US Signals: Al-Zaidi sent “positive signals” to Washington ahead of a mid-July visit, urging armed factions to work through the state and emphasizing an economic partnership with the US while keeping ties with Iran based on “good neighborliness.” Hormuz Impact on Iraq: Iraq’s foreign minister said closing the Strait of Hormuz hit Iraq’s financial and economic situation, underscoring how shipping chokepoints can quickly spill into domestic budgets. Kurdish Yazidi Pride in Sports: Germany striker Deniz Undav’s World Cup success is being celebrated by Yazidi and Kurdish communities, with his story tied to the legacy of the 2014 Sinjar attacks. World Cup Tie-Breakers: Senegal’s 5-0 win over Iraq boosted goal difference and helped them advance, while Iraq’s tournament ended in the group stage.

Fuel Market & Governance: Baghdad fuel station investors say Oil Products Distribution Company short-delivers 36,000-liter tankers by about 500–1,000 liters, then fines stations four times the value, as gasoline shortages since late May keep queues and black-market demand rising. Energy & Environment: The World Bank reports gas flaring hit a six-year high in 2025—167 billion cubic meters, up 6%—with flaring growth outpacing crude output, costing about $54bn. Healthcare Infrastructure: Heet’s 200-bed General Hospital in Al-Anbar is 72% complete, with remaining works and equipment installation pushing completion to April 2027 (possibly earlier). Oil & OPEC Politics: Iraq is pushing for reassessment of OPEC quotas amid debate over an exit; Baghdad also signals it won’t leave the cartel. Security & Sovereignty: Prime Minister Ali al-Zaidi says the US-led coalition’s combat mission ends next September and forces will leave Iraq, while Iraq insists weapons must stay within state institutions. Business & Trade: Iraq’s e-commerce boom is driving growth but also fraud and consumer mistrust. Regional Risk: Iran-US tensions around the Strait of Hormuz keep shipping and energy corridors in focus, with new route changes and drone/ship incidents raising uncertainty.

OPEC & Iraq Oil Policy: Iraq’s oil ministry says OPEC has started gradually restoring Baghdad’s pre-war production allocations and that Prime Minister Ali Faleh Al Zaidi hasn’t discussed leaving the cartel, after Reuters reported Iraq was weighing an exit if quotas aren’t raised amid Strait of Hormuz disruptions. Energy Markets & Shipping Risk: The Strait of Hormuz remains a flashpoint as the US carried out strikes in response to an attack on a commercial vessel, while Iran’s IRGC warns ships may need prior approval to transit—raising fresh uncertainty for oil flows and regional energy security. Digital Security: Cloudflare’s Project Galileo report highlights intensifying cyber threats against civil society groups, with DDoS attacks the most common risk. Iraq in the Spotlight (Sports): Senegal thrashed Iraq 5-0 in the World Cup group finale, ending Iraq’s campaign without a point, while Iraqi fans in Toronto faced the added emotional weight of Ashura during match week. Business & Trade (Regional): Baghdad is also linked to EU energy talks after Iraq floated an OPEC exit warning, underscoring how oil policy is driving broader investment and diplomacy.

OPEC Quota Clash: Iraq’s oil ministry says Prime Minister Ali al-Zaidi did not raise any plan to withdraw from OPEC, while Baghdad pushes for a higher production quota through OPEC’s technical, consensus-based process. Public Finance Shock: A senior Iraqi official reignited a dispute over “missing” $140bn in public revenues amid corruption probes tied to oil and electricity contracts, as Baghdad seeks ways to cover salaries after export pressure. Kurdistan Business Growth: Kurdistan Region reports 43,000 registered enterprises, including 3,000 foreign firms, citing eased registration and lower costs to spur private-sector activity. Oil Shipping Risk: UN maritime plans were paused after a projectile hit an Evergreen cargo ship near Oman; analysts warn that “safe corridors” fail without enforcement as Hormuz traffic remains a key energy lifeline. Ashura Security in Iraq: Karbala implemented its Ashura security plan with field supervision across routes; authorities treated tens of thousands of pilgrims and reported major medical operations. World Cup, Iraq-Senegal: Iraq plays Senegal in Toronto’s final group match, with fans expected to march to the stadium; the game is a must-win for Iraq’s slim qualification hopes.

OPEC Pressure on Iraq’s Oil Policy: Reuters reports Iraq is weighing “all available options,” including leaving OPEC, if its production quota isn’t significantly raised after the Iran-war disruption to Strait of Hormuz exports. Iraq’s July quota is cited at 4.378 mbpd, but output remains below capacity; officials say the financial squeeze is serious and OPEC allies should treat the quota request urgently. SOMO Oil Sales in Focus: Iraq’s state marketer SOMO issued a tender to sell Basra Heavy and Basra Medium for July loading, with pricing linked to Dated Brent (Europe), Argus Sour Crude Index (US), and Oman-Dubai (Asia). GCC Push on Hormuz Security: GCC foreign ministers, with US Secretary of State Marco Rubio in Manama, rejected any tolls or attempts to control the Strait of Hormuz and stressed freedom of navigation under international law. Iran Deal Doubts for Gulf Security: Commentary around the US-Iran framework highlights that implementation is hard and that Gulf security concerns are not fully addressed in the 14-point document. Ashoura in Iraq Amid Regional Tensions: Large Shiite crowds marked Ashoura in Karbala, with the observance taking place against the backdrop of renewed Iran-related war fallout. World Cup Business Angle: Iraq’s must-win group match vs Senegal in Toronto drew thousands of fans, with local businesses reporting a boost from the tournament crowd.

Digital Trade & Connectivity: Iraq signed a deal with Qatar’s GBI to market cross-border internet transit capacity using a long-term IRU model, with the first foreign-currency payment received. The “Civilizations Road” fiber corridor links al-Faw to Rabia via a land route, aiming to cut latency and position Iraq as a digital transit hub. Oil Policy & OPEC Pressure: Reuters reports Iraq has considered leaving OPEC if quotas aren’t raised enough to match its output capacity after Hormuz-linked export losses; Baghdad says it’s weighing “all options” but currently plans to stay and seek higher production flexibility. Budget Outlook: Iraq’s 2026 federal budget is unlikely to be submitted due to delays, with officials shifting focus to drafting the 2027 budget and revising the budget law to reduce the deficit. Security & State Control: US Secretary of State Marco Rubio says Washington received “positive signals” from Iraq on weapons-control efforts, with Iraq implementing a state-authority integration/disarmament plan and a September deadline for armed factions. Regional Business Links: Nineveh discussed Turkish involvement in Mosul airport operations and northern industrial projects, while Iraq and Qatar also move to deepen logistics and trade corridors across the region.

OPEC Pressure on Iraq: Iraq’s oil ministry is warning it may consider “all available options” — including leaving OPEC — if its production quota isn’t significantly raised, as Baghdad faces a deep financial squeeze tied to the Iran war and needs more barrels to stabilize state revenues. Energy Markets: With Strait of Hormuz traffic improving after an interim US-Iran understanding, crude prices slid back toward pre-conflict levels, easing near-term supply fears even as traders watch for any renewed disruptions. Oil Export Reality Check: Separate reporting says Iraq’s exports have collapsed during Hormuz closures, with officials pushing for quota relief and export routes to recover output and cash flow. Ashura Logistics & Economy: Ahead of Ashura in Karbala, authorities deployed large-scale medical, inspection, and municipal services to handle millions of pilgrims — a reminder of how major religious events can quickly turn into local economic activity. Regional Cooperation: The League of Arab States and UNODC met in Cairo to coordinate Arab efforts against drugs, transnational crime, terrorism, corruption, and financial crimes, including Iraq’s participation.

Kurdistan Oil Restart: The KRG says major energy firms have resumed production after airstrike repairs, including HKN Energy restarting at 7,000 bpd and Gulf Keystone at Sheikhan, with DNO set to restart Tawke and Peshkabir. Iraq-US Pivot to Trade: Prime Minister Ali al-Zaidi says Iraq’s relationship with the US is shifting from military ties to a “comprehensive economic partnership” after the ISIS coalition mission ends, with weapons handovers underway. Oil Export Pressure: West Qurna-2 in Basra has suspended operations due to force majeure and a tanker shortage, cutting production and storage activities to zero. US-Iran Gulf Diplomacy: US Secretary of State Marco Rubio is touring the Gulf to reassure UAE and Kuwait over a proposed US-Iran deal, while Oman opened temporary lanes for Hormuz transits to support negotiations. Regional Diplomacy: Iraq and Syria agreed to coordinate a visit by Iraqi FM Fouad Hussein to Damascus, aiming to expand political, economic and commercial cooperation.

US-Iran Diplomacy & Gulf Fallout: US Secretary of State Marco Rubio kicked off a Gulf tour from Abu Dhabi to reassure allies over President Trump’s Iran framework, including a proposed $300bn fund, while warning “significant work remains” and that Iran must follow through on commitments. Oil & Shipping Watch: Crude prices slid to the lowest since February as hopes for improved Strait of Hormuz flows and possible Iranian exports eased supply fears; meanwhile, Hormuz traffic is “beginning to breathe again” with Oman coordinating a phased, managed corridor via the IMO. Iraq Energy Exposure: Iraq’s economy is still dangerously tied to Hormuz—officials say 96–97% of crude exports run through the strait and oil revenue drives about 90% of state income—after the closure triggered massive export losses. Iraq Governance & Money: An Iraqi court sentenced al-Watan Party chief Yazan Mishaan al-Jubouri to five years for a $26.1m fraud scheme involving impersonation and promised access to the prime minister. Terror Finance Crackdown (Regional Spillover): The US sanctioned a Lagos-based ISIS-linked money exchange operator and three firms, targeting alleged ISIS fund-moving networks across Nigeria, Europe, the Middle East, and Türkiye. Iraq Business Angle: World Bank data also flags Iraq among the top gas-flaring countries, underscoring lost revenue and infrastructure gaps that keep associated gas from being monetized.

Iraq’s Legal Win: Iraq’s Justice Ministry says a US Supreme Court ruling dismissed a Jordanian firm’s $53M claim tied to state-linked industrial entities, calling it a win that protects public funds. Tourism Push: Iraq’s Tourism Authority nominated five villages—Byara, Rawanduz, Hiror, Merki, and Abu Subat—for the UN Tourism “Best Tourism Villages” 2026 initiative, aiming to boost sustainable rural tourism and local income. Energy & Environment: The World Bank ranks Iraq among the world’s biggest gas-flaring countries, noting flaring hit a six-year peak in 2025 and that cutting it depends on regulation, investment, and infrastructure. Food Security: Rice cultivation is rebounding in parts of Iraq after drought eased, but experts warn gains may not last through future dry seasons. Terror Finance Crackdown: The US designated a Nigerian national and companies as alleged ISIS financial facilitators, including money-exchange businesses used as conduits for cross-border transfers.

World Cup & Iraq Spotlight: France beat Iraq 3-0 in Philadelphia, with Kylian Mbappé scoring twice (his 100th cap) after a first-ever World Cup lightning suspension that paused play for about two hours; Ousmane Dembélé added the third as France advanced to the knockout stage. US-Iran Diplomacy & Gulf Oil Stakes: US Secretary of State Marco Rubio is set to pitch the Iran peace framework to Gulf Arab leaders in the UAE, Kuwait and Bahrain, with concerns over missile limits, a proposed $300bn reconstruction fund, and control of oil shipping lanes. Iraq Business & Finance: Iraq’s central bank leadership is in focus after reports of a new governor appointment, while currency chatter continues as the dinar reportedly hit record highs in Baghdad and Erbil. Energy Payments & Regional Investment: Dana Gas says Egypt cleared overdue payments, unlocking further drilling plans—an example of how payment discipline can revive energy investment. Kurdistan Politics: KDP accuses PUK of “policy of imposition” over stalled formation of the next Kurdistan government, keeping Iraq’s regional governance uncertainty alive.

Iraq-UK Anti-Corruption Push: Iraq’s Integrity Commission urged the UK to boost cooperation on recovering stolen assets and tracing corruption proceeds, stressing corruption is now cross-border and needs stronger extradition and legal assistance. Electricity Sector Shake-Up: Iraq’s Electricity Minister replaced the Al-Diwaniyah distribution head and also removed the Rusafa distribution director in Baghdad, part of a wider reshuffle after corruption arrests and asset freezes. Iraq-Türkiye Economic Talks: Iraqi PM Ali al-Zaidi and Turkish President Erdoğan discussed water management and ways to improve crude oil export flows, including Kirkuk–Ceyhan pipeline shipments, plus the Development Road corridor and potential gas and agriculture deals. CBI Banking Reform: The Central Bank of Iraq said it won’t change the official exchange rate and completed steps to reintegrate previously restricted banks into US-dollar external transfers, citing banking reform and anti–money laundering controls. Oil Shipping Watch: Tanker traffic through the Strait of Hormuz picked up after Iran said it closed the waterway again over the weekend, with ship-tracking showing LNG and crude movements resuming toward Iraqi and regional ports. Transport Appointments: Iraq’s Transport Minister named an acting ports chief for three months, overseeing the state-owned ports company tied to the Development Road and Grand Al-Faw Port project.

Iraq Banking Reform: Iraq’s PM Ali al-Zaidi stressed the need to keep banking reform moving as the Central Bank of Iraq hands over leadership to Nizar Hussein, with reforms aimed at compliance, governance, transparency, and smoother international transfers. Oil Output Push: Iraq’s Ministry of Oil says it’s working to lift production toward 4.3 million bpd and restore exports, including rehabilitation of southern fields and faster pumping and export operations through southern ports. Kurdistan Jobs Drive: Kurdistan Region tourism investment has created over 20,000 jobs, with 80% filled by locals, supported by dozens of major tourism projects and infrastructure upgrades. Hormuz Trade Shock: Shipping through the Strait of Hormuz fell sharply after Iran again closed the waterway, with only a handful of vessels transiting on Sunday, while the U.S. said commercial traffic continued. Diplomacy vs Markets: Brent slipped after U.S.-Iran talks in Switzerland, where Iran said it secured waivers for oil and petrochemical exports, easing supply fears. UAE-Iran Shipping Resumes: The UAE agreed to reopen ports to Iranian commercial vessels, helping restart shipments and reduce disruption for merchants using routes that include Iraq’s Umm Qasr. World Cup Disruption Risk: Severe storms and lightning rules could delay or pause the France-Iraq match in Philadelphia, adding uncertainty for fans and logistics.

Central Bank Leadership: Iraq appointed Nizar Hussein as the new governor of the Central Bank of Iraq, replacing Ali Mohsen al-Alaq, as Prime Minister Ali al-Zaidi pushed banking reform and modernization. Oil Output Push: The Oil Ministry ordered companies to ramp up production and exports, targeting a return to pre-crisis levels of about 4.2–4.3 million bpd and roughly 3.5 million bpd in exports via southern terminals after Strait of Hormuz disruptions. Northern Exploration Restart: Iraq began drilling its first northern exploration well since 1978, signaling renewed upstream activity in the north. Fiscal Strategy: The government said it will not use external borrowing to plug gaps, instead betting on alternative revenues and new exploration to stabilize finances. Cabinet Timeline: Iraq plans to finalize its new cabinet in early July ahead of PM al-Zaidi’s U.S. trip. Kirkuk-Dubai Connectivity: Kirkuk International Airport launched its first direct flights to Dubai, aiming to boost travel, trade, and tourism. Kurdistan Security for Energy: Baghdad and Erbil moved to provide security guarantees for oil companies in Kurdistan amid ongoing attacks. Landmine Cleanup Pressure: A monitor warned nearly 4,800 sq km of Iraqi land remains contaminated, hurting agriculture and development. Trade Corridors: AD Ports launched integrated logistics linking Khalifa Port to Umm Qasr, strengthening Gulf-to-Iraq and onward routes to Türkiye and Europe.

Iraq’s 2026 Budget Under Pressure: Iraq is facing unprecedented fiscal strain as oil export disruptions from the Strait of Hormuz hit revenues, while parliament has repeatedly failed to pass a budget on time, leaving the government reliant on emergency spending and raising IMF concerns about inflation, external balances, and public finances. World Cup Build-Up in Philadelphia: Iraq’s national team arrived in Philadelphia for a Group I clash with France, with fans welcoming the squad ahead of a must-improve performance after a 4-1 opening loss to Norway. US-Iran Talks and Hormuz Risk: JD Vance and Iranian negotiators are in Switzerland to implement a US-Iran MoU, but Iran’s renewed threats around the Strait of Hormuz keep energy-market uncertainty alive. Anti-Corruption Push: Iraq’s Integrity Commission says it is reviewing government contracts and pursuing corruption cases, following a reshuffle that also touched financial and security agencies. Kurdistan Domestic Violence Update: In Iraq’s Kurdistan Region, psychological abuse remains the most common domestic violence category, with rising marriage and divorce registrations reported for 2024-2025. Oil Market Spillover: India’s refiners boosted Russian crude imports in June and leaned on UAE supplies as Hormuz reopening expectations shaped sourcing decisions.

Oil Exploration Restart: Iraq’s Ministry of Oil has begun drilling its first northern exploration well in Amerli, Saladin—its first since 1978—aiming to boost hydrocarbon reserves and long-term production capacity. Kurdistan Exports & Security: Erbil and Baghdad are coordinating to protect oil fields as Kurdistan’s exports fell sharply after attacks; officials say production and exports should resume as security guarantees and payments to foreign operators are secured. Oil Output Recovery: Iraq expects oil production to return to pre-war levels within 1–2 months as the Strait of Hormuz reopens and damaged operations restart. Oil Market Logistics: Reports say oil companies will resume exports from more Kurdistan fields in coming days/weeks, after prolonged suspensions tied to regional instability. Militias Integration Plan: Experts say Iran-backed armed groups are likely to be integrated into state structures after the US-Iran deal, reflecting Baghdad’s limited control over powerful factions. FX Pressure: The Iraqi dinar’s parallel market rate jumped to around 156,000 IQD per $100 at evening close amid Gulf anxieties. FATF Gray List Return: Iraq’s return to FATF enhanced monitoring raises risks for correspondent banking, compliance costs, investment flows, and further pressure on exchange rates. Trade Corridors: Iraq and Iran-linked rail freight is moving toward Afghanistan via Kermanshah, signaling renewed regional logistics activity.