AGP Executive Report

US-Iraq Withdrawal: The Pentagon says the US-led coalition mission in Iraq has formally ended, with the last troops leaving after 23 years; Washington says it will continue targeted training and intelligence support while Baghdad takes full responsibility for security decisions. Iraq Sovereignty & Security: Iraqi PM Ali al-Zaidi says military decision-making is now “entirely national,” as fears grow that pro-Iran factions and ISIS remnants could exploit the vacuum. Shia Cleric Calls for Compensation: Muqtada al-Sadr urged Iraqis to file legal complaints and demanded the US compensate Iraq for damages from the occupation. US-Iran Tensions & Hormuz: Trump claimed Iran is “virtually destroyed” and said the US has near-total control of the Strait of Hormuz; Iran says it received a US response to its proposal to reopen the strait and ease the blockade. Oil & Shipping Risk: Reports say three vessels were struck near Hormuz, while oil flows and traffic appear to be rising despite the attacks. Business Angle—Air Connectivity: Iraq’s national carrier Iraqi Airways is preparing to resume limited Iran flights after US waivers, a move tied to broader sanctions pressure and regional trade routes.

US-Iraq Exit: The U.S.-led coalition formally ended its Iraq mission as troops completed withdrawal, with Baghdad declaring “Sovereignty Days” from Sept. 30 to Oct. 3; the Pentagon said Operation Inherent Resolve is over, shifting security toward Iraqi-led control. Kurdistan Security: Erbil’s leaders praised coordination with Baghdad but warned of an air-defense gap as coalition forces leave; drones struck Azadi Camp in Koya days before the pullout, underscoring the risk. Armed Factions vs State Control: Some Iraqi groups hailed the exit while others rejected any weapons handover and threatened action, pushing for modern air defenses and state control over oil revenues. Oil & Trade Signals: SOMO offered deeper October discounts on Basrah crude (up to $34.50 for Basrah Medium and $37 for Basrah Heavy), while Gulf markets fell on renewed Middle East uncertainty. Iraq-Turkiye Commerce: Iraq ranked as Turkiye’s fourth-largest export destination in August, buying $1.079bn. Payments & Industry: Iraq’s push for infrastructure and investment continues, including plans around data centers and new logistics deals, as regional geopolitics reshape business planning.

US-Iraq Sovereignty Shift: The last US-led coalition forces are set to leave Iraq by Sept. 30, a move Baghdad frames as sovereignty while analysts warn it could weaken the state’s leverage over Iran-backed armed groups. Arms Under State Control: Four Iraqi factions say they’ll place weapons under state authority only if conditions are met, including withdrawal of foreign forces and removal of armed groups and the PKK. Iraqi Airways Iran Route Reopens: Iraq’s Transport Ministry says Iraqi Airways will resume flights to Iran in October, limited to Najaf International Airport, after a US sanctions waiver; OFAC authorization restricts passengers to Iranian pilgrims and bars sensitive cargo and Iran-linked groups. Sanctions Pressure Continues: The US Treasury sanctioned 10 individuals/entities over alleged support for Iran’s Defense Ministry procurement, while Iraq seeks broader aviation exemptions. Oil Exports Bounce Back: Analysts say Iraq’s oil exports have recovered to about 70% of pre-war levels as transfers via Hormuz and Iran resume. Power & Industry: Iraq’s electricity minister met Poland’s ambassador to discuss power-station rehabilitation and new partnerships; Iraq also plans to regulate foreign labor more tightly to balance market needs with specialized expertise. Anti-Corruption Crackdown: Iraq’s Central Anti-Corruption Court sentenced MP Mohammed al-Jubouri to seven years and ordered repayments tied to illicit enrichment, part of the “Dawn Crackdown.” Business Costs Watch: Caltex raised petrol prices in line with Shell, signaling cost pressures amid regional supply worries. Energy Transit Disruption: Syria reported sabotage on its gas network, raising risks for regional fuel and power corridors.

US-Iraq Withdrawal Shock for Kurdistan: Financial Times reports US troops are set to leave Iraq by Sept. 30, but Kurdistan leader Masrour Barzani calls it “shameful,” warning the region lacks air defence and faces real vulnerability to Iranian drones and missiles. KRG Budget Fight: Erbil says Baghdad has withheld most of its budget share since 2014 and demands its 14.14% census allocation be used for Iraq’s 2027 budget, accusing manipulation of disputed-area counts. Iraq Stock Exchange Links Up Regionally: The Iraq Stock Exchange went live on ADX’s Tabadul platform, letting investors trade Iraqi listings directly and expanding cross-market access across multiple exchanges. Sanctions Hit Air Links: Iraq suspended Iranian flights after US aviation sanctions; Kataib Hezbollah warned it will monitor Iraqi airspace and threatened to shoot down “hostile” aircraft, while the Najaf-Iran route later resumed under a sanctions waiver. Oil Trade Signal: Reports say crude exports through Hormuz bypass routes are back near 80% of pre-conflict levels, easing pressure on regional shipping. Business & Tech: QualityKiosk Technologies won a UiPath 2026 Partner of the Year award; SLB OneSubsea secured a major subsea contract for Mozambique’s Rovuma LNG phase. Security & Economy Pressure: Iraqi Hezbollah brigades threatened to topple PM Ali al-Zaidi if he doesn’t resist the US line on Iranian airlines and air traffic.

Iran Aviation Sanctions Relief for Iraq: The US is set to grant a limited one-month waiver to allow Iraqi Airways flights between Iran and Najaf for Shi’ite pilgrimage, after Iraq halted Iran-bound flights and faced pressure from PM Ali al-Zaidi and protests. Air Travel Disruption in Iraq: Despite Najaf resuming Iran flights, Iraqi officials say the broader ban on Iranian airlines remains, with Iraq seeking further exemptions as US secondary sanctions deter ground services. Iraq–Syria Trade Facilitation: Iraq and Syria agreed to streamline truck transit and border operations, including expanding Rabia crossing capacity, adding dedicated commercial lanes, and enabling electronic customs data exchange. Kirkuk Export Boost: Iraq increased crude volumes allocated for export via the Kirkuk system to about 250,000 bpd, supported by higher flows from Basra and Kurdistan. Telecom Court Win: A Baghdad court overturned the regulator’s cancellation of Korek Telecom’s 2025 financial settlement agreement, restoring the deal and pushing for stability in services. Investment in Power Equipment: Iraq’s National Investment Commission held talks with Swiss Main Power Engineering on a high-tech electrical equipment manufacturing and testing complex. Security Pressure on Baghdad: Kataib Hezbollah warned it could bring down PM Ali al-Zaidi’s government if restrictions on Iranian aviation continue, threatening escalation including border closures.

Iraq’s finance crackdown: Iraq’s Finance Ministry has launched an investigation into state lending, declining liquidity and possible corruption, including electronic-loan insurance payments and approvals at state banks, with findings routed to oversight bodies. Sanctions squeeze on aviation: US secondary sanctions targeting Iran’s aviation sector are making travel and cargo routes more erratic, with airports and service providers facing higher risk of losing access to the US financial system. Kurdistan security warning: The KRI Peshmerga Affairs Ministry says the Sept. 30 end of the US-led coalition’s Kurdistan presence leaves the region exposed, citing heavy drone and missile targeting during the recent US-Iran war and urging stronger air-defense coordination with Baghdad. Top-level talks in Baghdad: Iraq’s president, PM, parliament speaker and judiciary chief plan to discuss Iranian flight restrictions, US sanctions warnings to airports, and steps to bring armed factions’ weapons under state control as the coalition exit nears. Oil trade signals: India’s state refiner bought 2 million barrels of Iraqi Basrah crude at about a $28 discount to the October Dubai benchmark, highlighting how Hormuz-linked logistics and insurance costs are reshaping pricing. Markets update: The Iraq Stock Exchange logged over $4.58M in weekly trading value (up 8%), with ISX60 edging higher as activity remained uneven across listed firms. Energy corridor shift: Iraq-Syria border trade is increasingly centered on oil and fuel flows, with Syria shipping gasoline to Iraq as Hormuz disruptions push new routes. Corporate deal: Capricorn agreed to be taken over by Genel after DNO’s competing bid, keeping Kurdistan-linked assets in focus.

Asset Recovery: Iraq recovered $13m held in French banks after court orders, with funds deposited into Ministry of Finance accounts via the Iraqi Fund for Asset Recovery. Diplomacy & Investment: Iraq’s new ambassador to the US, Krikor Der Hagopian, presented credentials to President Trump, pledging closer political, economic, investment and security ties. Sanctions Pressure on Aviation: Baghdad is seeking US exemptions to restore civilian flights with Iran as airports face warnings over servicing sanctioned Iranian carriers; an Iranian VIP flight still landed in Baghdad under special permission. Energy & Trade Routes: Syria has begun gasoline transit to Iraq via the Banias oil terminal, while Iraq and Syria agreed to streamline border trade with electronic customs-data exchange, aiming to lift bilateral trade by 30–50%. Basra Jobs Dispute: FCC project workers in Basra started an open-ended sit-in outside the Southern Refineries Company, demanding Oil Ministry reinstatement and permanent contracts after security forces dispersed earlier protests. Budget Planning: Iraq’s ministerial economy council approved the draft 2027 federal budget, with a push for non-oil revenue and gradual rollout of program/performance budgeting. Security & Regional Signaling: Iraq’s security media cell is coordinating messaging with Kuwait, while pro-Iran factions warn they may abandon commitments if Baghdad backtracks on guarantees.

Aviation & Sanctions: Iraq’s Shiite Coordination Framework meets PM Ali Al-Zaidi to weigh the fallout from suspending Iranian flights, after a US warning that sanctions could hit any airport or service provider handling Iranian carriers; Baghdad is also negotiating exemptions for humanitarian and civilian travel. Currency & Liquidity: Iraq and the US agreed to resume physical dollar cash shipments to Baghdad, with another delivery expected soon, after Iraq tightened oversight of foreign-currency distribution and expanded electronic payments. Anti-Corruption: Iraq’s Integrity Commission arrested two bribery suspects in Baghdad tied to land-lease renewals and delayed pension salary releases. Kurdistan Security: The US-led coalition halted financial aid to Peshmerga after a four-year deal expired, while the KRG says it lacks adequate air defense as US forces withdraw. Digital Infrastructure: Iraq unveiled a plan for distributed enterprise data centers across Baghdad, Basra, and Mosul. Energy & Trade: US crude imports from Iraq resumed with shipments averaging 51,000 bpd. Waterway Dispute: Basra-based groups urged Iraq to prioritize the Khor Abdullah dispute in a new Iraq-Kuwait committee. Defense Procurement: Iraq is moving to buy air defense systems from Turkey and France as coalition drawdowns raise security pressure.

Basra Industrial Push: Iraq’s National Investment Commission is in talks with India’s Man Industries on a pipe manufacturing complex in Basra to supply oil, gas and water pipeline projects, offering incentives like 10-year tax and customs exemptions. Sanctions & Aviation: Baghdad is negotiating with Washington for exemptions so flights to and from Iran can resume at Iraqi airports after US aviation sanctions hit Iranian carriers, with passengers facing long overland travel. Dollar Liquidity: Iraq says it reached an understanding with the US to continue cash USD shipments, with a new delivery expected soon as Baghdad tightens foreign-exchange controls. Protests & Jobs: Baghdad braces for five days of demonstrations tied to public-sector hiring, budget inclusion for 2027, and education and legal-right demands. Environment & Services: Karbala launched Iraq’s first smart waste collection system using an underground network to move waste to transfer stations, with Spanish technical support. Maritime Legal Clarity: An Iraqi maritime expert says Iraq’s maritime boundaries need legal and technical clarification, after UN coordinate submissions triggered objections from Kuwait and the GCC.

Aviation Sanctions Talks: Iraq’s Prime Minister’s office says it’s in direct talks with the U.S. Treasury to exempt some Iraqi airports from the shutdown of Iranian airlines, aiming to restart flights for humanitarian needs like medical treatment, education, religious visits, and civilian travel. Airport Disruptions: The curbs have already triggered suspensions at key hubs including Najaf, with Iraq warning the longer the crisis drags on, the worse it gets for travel and local business. Political Pushback: Iraq’s first deputy parliament speaker Adnan al-Dulaimi called the restrictions unconstitutional and warned parliament could act if they aren’t reversed, citing losses to religious tourism and aviation fees. Militia Pressure: Iran-backed groups, including Harakat Al-Nujaba, threatened airport sit-ins unless flights resume, escalating pressure on Baghdad. Energy Strain: Iraq’s power system remains heavily dependent on imports, with purchased electricity covering 41% of supply, while drought has cut hydro output sharply—raising the stakes as regional shocks continue. Regional Trade Shock: Separately, Iraq’s economy is feeling the wider impact of the Iran war and shipping disruptions, with oil revenue losses reported as a major hit to the budget.

Aviation Sanctions Hit Iraq-Iran Travel: Iraq suspended flights with Iran across multiple airports after new US aviation sanctions, with Najaf, Baghdad, Erbil and Sulaimaniyah among those affected; Iranian officials warned air travel could be disrupted regionwide if Iranian airlines keep losing access to airport services. Political Pressure at Airports: Iran-aligned Iraqi faction Harakat Al-Nujaba threatened airport sit-ins unless normal air traffic with Iran resumes, accusing Baghdad of acting under American dominance. Diplomacy and UN Pitch: Iraqi PM Ali Al-Zaidi urged the world to “invest with Iraq” at UNGA, pushing energy corridors and anti-corruption plans while meeting regional leaders. Iraq-Kuwait Roadmap: Iraq and Kuwait agreed to a 30-day joint working group to review outstanding issues, including Khor Abdullah navigation and maritime border demarcation. Gulf Tensions and Energy Risk: India’s Jaishankar discussed Gulf conflict developments with Iran’s FM at UNGA, as Hormuz and Red Sea risks keep pressuring trade and shipping costs.

Iraq-Iran Aviation Shock: Iraq has suspended flights to and from Iran across all major airports, with Najaf halting services from 2:00 a.m. Friday and Erbil and Sulaymaniyah following suit, while Kirkuk reports no Iran flights—moves tied to US sanctions pressure on Iran’s aviation sector and fears of secondary penalties. Regional Energy Pressure: As Saudi crude reroutes through the Strait of Hormuz after Red Sea disruptions, Gulf shipping is getting congested and tanker demand is spiking, pushing VLCC rates to record levels and raising costs for ship-to-ship transfers. UN Diplomacy Fallout: In New York, nearly 70 countries walked out or left seats vacant as Israeli PM Netanyahu began his UNGA address, including Iraq among those reported absent, underscoring widening political and reputational pressure amid the Gaza and wider regional conflict. Syria-Iraq Fuel Trade: Syria Petroleum Company says it has started gasoline shipments via Syrian ports toward border crossings into Iraq, with tankers already unloaded and more convoys planned. Business & Finance: Bank al Etihad signed an MoU to set up a lender in ADGM, signaling continued regional banking expansion.

Iraq–Turkey Rapprochement: Iraq and Türkiye announced the gradual handover of the Turkish Bashiqa–Zilkan military base to Iraq’s federal government, a major step after years of security friction, with Baghdad also pushing development projects like the Development Road. Iraq–US Transition: Iraq officially signed an agreement to take over the U.S. embassy diplomatic support center at Baghdad International Airport as the Sept. 30 end of the U.S.-led coalition mission approaches, shifting the relationship toward a new partnership phase. Iran Aviation Hit by Sanctions: The UAE suspended all flights by Iranian airlines, joining Oman and other states restricting access as new U.S. sanctions target third-country aviation links; reports also cite disruptions affecting Baghdad and possible rerouting to Najaf. Iraq–Armenia Trade Boost: Armenia and Iraq agreed to expand exports of Armenian goods, including agricultural products, as both sides emphasized connectivity and cooperation in multilateral forums. Regional Energy Watch: Strait of Hormuz saw about 60 commercial vessels transit Wednesday, carrying roughly 22 million barrels of oil, while talks reportedly explore phased steps linking navigation reopening with lifting parts of the blockade. Local Governance & Business Climate: Iraq’s licensing and investment push continues as the government seeks foreign firms to accelerate projects, alongside ongoing efforts to stabilize finances and fuel policy.

Iraq Economy & Finance: Iraq recovered $13M in state funds held abroad after court rulings, depositing it into the Ministry of Finance accounts via Arab Bank (Switzerland), according to the Iraqi Fund for Assets Recovery. Oil & Trade: Iraq’s exports continue to move despite regional strain, with reports citing 2.6 million bpd from southern ports and fuel exports via Jordan to global markets. Currency & Banking: Baghdad dismantled an unlicensed currency exchange and money transfer network, arresting five suspects and seizing $240,000; the dinar has recently weakened to around 1,600 IQD per USD on parallel-market pressure. Regional Security & Sovereignty: Turkey agreed to gradually hand over the Bashiqa-Zilkan base to Iraq, tied to steps to restore Iraqi state authority in Sinjar and remove “banned foreign armed elements,” with no clear timetable announced. Energy Infrastructure: Iraq plans to raise gas production at Nahr Bin Umar to 300 million cubic feet and reports new gas processing activity at East Baghdad South Field.

Iraq–Türkiye Security & Trade: Iraqi PM Ali al-Zaidi and Turkish President Recep Tayyip Erdogan agreed to deepen security cooperation, restore full Iraqi state authority in Sinjar, end “outlawed foreign armed elements,” and start a gradual handover of the Bashiqa–Zilkan camp to Baghdad under a set mechanism and timetable. They also pledged to expand bilateral trade and investment and accelerate the Development Road project. Energy & Gas Supply: Iraq’s Ministry of Oil plans to boost associated gas recovery at the Nahr Bin Umar field to 300 million cubic feet per day, in two phases, aiming to cut flaring and support the electricity grid. Aviation Sanctions Pressure: The U.S. tightened sanctions on Iran’s aviation sector, triggering cancellations of some international flights; Iran warned neighboring airports they could face disruption if they comply. Defense & Budget Context: A U.S. House move would raise the Pentagon budget to $1.5 trillion, keeping pressure on fiscal accountability and spending priorities. Regional Diplomacy: France said Iraq ties are gaining momentum and backed a UN push focused on reopening the Strait of Hormuz to reduce energy-market risks.

Anti-Corruption Crackdown: Iraq’s Central Anti-Corruption Criminal Court sentenced MPs Alia Nassif and Ashwaq al-Jubouri to prison terms after convictions tied to illicit enrichment, ordering repayments and fines totaling more than $55 million. Banking & Currency Controls: Iraq’s Federal Intelligence and Investigation Agency dismantled an illegal dollar-trading network in Baghdad and probed suspected corruption in Al-Diwaniyah, including alleged pay-for-appointments at the Education Directorate. Sanctions Hit Aviation Links: New US sanctions targeting Iran’s aviation sector took effect, with Iranian airlines suspending flights to Baghdad and Muscat (and other destinations), while Iraq reportedly weighs rerouting to Najaf. Trade & Oil Flows: Iraq posted a $10.82bn trade surplus in Q1, driven mainly by crude exports, and launched a tender to sell 2m barrels of Basrah Heavy crude via ship-to-ship transfer off Oman. Financial Policy Shift: Prime Minister Ali al-Zaidi said Iraq is restructuring its financial policy, including moving toward a program-and-performance budget for 2027. Market Watch: The US dollar eased in Iraq’s parallel exchanges, hovering around the 157,000 IQD range across Baghdad, Erbil and Basra.