AGP Executive Report

Kurdistan Security: Iran launched two Hadid-110 drones into Iraq’s Kurdistan Region, hitting Prime Minister Masrour Barzani’s private office and the home of a senior security intelligence official in Erbil, with no casualties reported. Hormuz Deadlock: The 60-day US-Iran MoU deadline expired without a deal as both sides blame each other over the Strait of Hormuz, sanctions, and navigation; Iran says its armed forces remain ready. Iraq Finance Response: Iraq’s finance minister said the Hormuz crisis is already hitting the economy and pledged steps to raise non-oil revenue and introduce Iraq’s first performance-based budget. Oil Market Workarounds: Reports say covert “shuttle” shipments and transshipment schemes are moving millions of barrels daily through/around Hormuz, helping cap price spikes—while Iraq remains among the hardest hit exporters. Tourism Push: Iraq plans to grow tourism to 10% of GDP by 2035, targeting 10 million visitors a year, 1.5 million jobs, and major heritage site upgrades. Anti-Corruption Courts: Iraq’s Integrity Commission reported prison sentences and asset seizures in major graft cases, including a former Nasiriyah municipality official jailed for bribery and land fraud. Currency Watch: Parallel dinar rates in Baghdad, Erbil, and Basra rose to about 154,500 IQD per $100, widening the gap versus the Central Bank’s official rate. Regional Infrastructure Plan: Reuters says an Iraq-Syria oil pipeline to bypass Hormuz could take about four years and cost at least $15bn, with feasibility work underway. Energy Security Context: Iraq’s electricity crisis and public-sector wage burden remain central to social stability as unemployment and fiscal strain drive unrest, including graduate job protests that disrupted the Babil-Baghdad highway.

Iraq’s Budget Overhaul: Iraq is preparing to pass its first performance-based budget, tying spending to measurable results as the economy absorbs pressure from the Strait of Hormuz disruption. Air Defense Modernization: Prime Minister Ali al-Zaidi chaired plans to expand Iraq’s air defense capabilities, including contracts with foreign firms for advanced systems to better monitor and protect Iraqi airspace. EU Openness Push: Al-Zaidi also met Italy’s ambassador, reiterating Iraq’s goal of deeper economic openness with EU countries. Anti-Corruption Crackdown: An Iraqi court sentenced former Saladin Governor Ammar Jabr to seven years for illicit enrichment, as authorities continue pursuing financial corruption cases. Electricity Relief in Kurdistan: In the Kurdistan Region, more than 170,000 beneficiaries used a legacy-debt discount under the Runaki electricity project, with discounts running until Sept. 10. Trade & Finance Links: Iran’s central bank governor said he will tackle barriers for Iranian businesses in Iraq, including customs tariffs and unpaid dues, to boost bilateral trade. Oil-Route Pressure: With Hormuz still constrained, reports say covert “dark” shipments and ship-to-ship transfers are helping keep global prices steadier than feared. Consumer Tech Hit: Smartphone shipments across the Middle East (excluding Turkey) fell 19% in Q2 2026, with Iraq down 36% year on year.

Iraq Anti-Corruption Push: Iraq’s Supreme Judicial Council says it seized about $26m in cash, 60kg of gold and seven vehicles linked to former Deputy Oil Minister Adnan Al-Jumaili, as investigations into refinery waste and embezzlement continue. Oil Exports Recovery: Iraq’s daily oil exports since early August have rebounded to around 2 million bpd, the highest since the Feb. start of the Iran war, with exports totaling roughly 26m barrels in the first two weeks. Judiciary Asset Seizures: A separate court update in the same case confirms $20.34m plus 200m IQD and 60kg of gold were recovered, with legal steps ongoing against other suspects. Safety Enforcement in Kurdistan: Erbil says it has shut 900 non-compliant commercial buildings since the start of 2026 for failing fire and safety standards, citing flammable materials and electrical short-circuit risks. Regional Energy Pressure: With Hormuz under strain, Türkiye says Ceyhan could be turned into a “Rotterdam,” highlighting the Kirkuk–Ceyhan route and renewed transit arrangements to move Iraqi crude. Hormuz Standoff: Iran rejects Trump’s claim it will declare Hormuz U.S. territory, saying the strait “will remain Iranian,” as shipping risks keep rising.

Hormuz Flashpoint: Iran rejected Donald Trump’s claim it will soon declare the Strait of Hormuz a U.S. territory, saying the waterway “will remain Iranian,” as the U.S. and Iran’s 60-day ceasefire deadline nears and CENTCOM redirected more than 60 ships amid continued tanker incidents. UAE Blames Tehran: The UAE said an ADNOC-linked vessel was attacked in Hormuz and called it “piracy” by Iran’s Revolutionary Guard Corps, while Iran keeps signaling it won’t reopen the strait without sanctions relief and an end to attacks. Iraq Power Plan: Iraq’s Prime Minister Ali al-Zaidi ordered a push to double electricity production and distribution capacity in 2027, targeting 30,000MW domestic capacity plus imports, as demand peaks near 55,000MW. Oil & Trade Pressure: Kuwait warned Hormuz disruptions are the toughest hit to its oil sector since 1990, highlighting how the region’s shipping bottleneck keeps raising costs and uncertainty for Gulf crude exports. Defense Budget Talk: U.S. Defense Secretary Pete Hegseth urged Congress to approve a $1.5tn 2027 military budget, underscoring how the wider conflict climate is shaping spending priorities.

Iraq Oil & Industry: Iraq’s Ministry of Oil signed an agreement with Japan’s JGC Corporation to restart work on the South Refineries Company FCC project in Basra, aiming to boost domestic fuel output and cut import costs. Trade & Customs: Iraq’s General Customs Authority collected 2.5 trillion IQD in revenues in the first seven months of 2026, matching all of 2025, with July alone hitting 560 billion IQD as automation and anti-smuggling measures expand. Security & Courts: Syria and Iraq agreed to form joint judicial committees to review ISIS detainee cases transferred from Syrian prisons to Iraq, with regular meetings planned for trial files. Regional Energy Flashpoint: Iran rejected U.S. claims that the Strait of Hormuz will become U.S. territory, warning it will remain under Iranian control as attacks and shipping risks continue. Diplomacy & Appointments: Switzerland named Dr. Thomas Oertle as ambassador-designate to Ghana, Benin and Togo, with prior experience covering Syria and Iraq.

Iraq Oil & Exports: Iraq’s Oil Minister Basim Mohammed Khudair says exports have climbed to about 2 million bpd since early August, after the Strait of Hormuz disruption hit shipments hard; July exports averaged around 1.5 million bpd. Anti-Corruption at Ports: Prime Minister Ali al-Zaidi ordered faster automation and full digital integration at border ports, including daily reporting and tighter controls on smuggling and illegal financial activity, with the Border Ports Authority moving to link systems with ASYCUDA. Electricity Sector Crackdown: Iraq’s Integrity Commission arrested a deputy minister at the Ministry of Electricity over alleged financial violations, as the government pushes a second phase of its anti-corruption drive. Budget Planning: Iraq’s parliament is set to hold the first reading of the 2027 budget next week, with delays blamed partly on the financial strain from Hormuz-related export losses. Regional Energy Pressure: With Hormuz traffic still volatile, Iraq is reportedly selling crude to ADNOC as a workaround, while attacks on Hormuz shipping continue to raise risk for Gulf trade.

Anti-Corruption Crackdown in Power Sector: Iraqi security forces in Erbil detained Electricity Ministry undersecretary Khalid Ghazai Attiya, as part of ongoing efforts to clamp down on corruption and illegal grid connections. Kurdistan Drone Threats: Kurdistan authorities said coalition forces intercepted three suicide drones over Erbil early Friday, with no casualties, as attacks tied to the US-Iran war continue. Hormuz Tensions Hit Oil Shipping: The UAE blamed Iran for drone attacks on two ADNOC-linked vessels in the Strait of Hormuz, calling it piracy and demanding unconditional reopening, while the wider standoff keeps global oil supply risk elevated. Iraq-US Exit Deadline Under Strain: With the US-led coalition withdrawal set for Sept. 30 and militia disarmament tied to the same date, Baghdad is raising alert levels, underscoring how hard it is to meet Washington’s conditions without renewed internal conflict. Baghdad Retail Expansion: Lebanese restaurant Al Beiruti announced plans to open its first Iraqi branch in Baghdad’s Iraq Mall, signaling continued growth in the capital’s consumer and private-sector scene.

Customs Modernization: Baghdad and Erbil agreed to fully roll out the UNCTAD ASYCUDA digital customs system across border crossings, with non-oil border earnings shared between the federal government and the Kurdistan Region—aimed at cutting revenue leakage and improving the business climate. Anti-Corruption Push: Iraq’s Federal Integrity Commission head said looted public funds and fugitives won’t find safe haven, with corruption charges having no statute of limitations and stronger cross-border asset recovery efforts. Security & Sovereignty: Iraq’s top security delegation met Saudi officials in Riyadh to boost military cooperation, focusing on drone threats, air defense, and intelligence after heightened tensions tied to Iran-backed militia activity. US-Iran Pressure Spillover: Analysts say Iraq may consider using force to disarm Iranian-backed militias if they don’t comply by Sept. 30, with intensive talks reported between Baghdad and the IRGC over the disarmament process. Judicial Cooperation: Iraq’s Supreme Judicial Council chief met Syria’s justice minister in Damascus to coordinate on ISIS detainees and legal status of transferred prisoners, including plans for joint committees.

Iraq-US Sovereignty Reset: Iraq’s PM Ali Al-Zaidi says Sept. 30 is the “fixed and final” deadline to end the US-led coalition mission, with Oct. 1 marking a new phase free of foreign military presence, while Baghdad pushes state control of weapons and shifts ties toward economic and security cooperation. Kurdistan Customs Deal: Erbil and Baghdad reached a “final agreement” to implement the ASYCUDA digital customs system and settle disputes, including a 50-50 border revenue split. Anti-Corruption Pressure: Iraq’s expanding crackdown continues, with reports of arrests and scrutiny widening under PM al-Zaidi’s drive. Oil & Energy Impact: DNO reports $761m Q2 revenue and seeks KRI output recovery after Tawke operations resumed, while Hormuz disruptions keep weighing on regional trade routes. Business Moves: Iraq’s banking and digital payments push continues, including new access for online merchants and reforms aimed at attracting regional investors. Security Operations: Iraqi forces dismantled an international drug smuggling network in Kirkuk, seizing about 20kg of marijuana.

U.S.-Iraq Withdrawal Deadline: Iraqi PM Ali al-Zaidi reiterated that Sept. 30 is the “fixed and final” date to end the international coalition’s mission and complete coalition force withdrawal, with Oct. 1 marking a “new day” for Iraqi sovereignty and state control of weapons. Security-to-Economy Shift: The same message ties the pullout to Iraq’s push for development, saying Iraq needs citizens’ efforts to build a stronger economy and stable state. Oil-Trade Pressure on Iraq: With the Strait of Hormuz disruption continuing to squeeze exports, reports say Iraqi government cashflow strain is delaying public salaries, including in Mosul. Regional Trade Talks: Türkiye and Iraq discussed steps to raise bilateral trade to $30B, focusing on Development Road projects and resolving issues facing Turkish exporters. Business Spotlight: Estithmar Holding reported solid H1 2026 results, with revenue up to QR3.159bn, net profit up 21% to QR561m, and market cap around QR20bn—highlighting continued regional expansion that includes Iraq.

Iraq Oil & Trade Under Strain: With the Strait of Hormuz still unstable, global oil stockpiles are “rapidly depleting,” and prices stay jumpy as reopening talks drag on—pushing Iraq to lean on alternative export routes and partners. UAE Oil Logistics: ADNOC is reportedly shuttling Iraqi crude through Hormuz using short-trip tactics to keep barrels moving despite the Iran war, an unusual workaround that could affect Iraqi export flows. Digital Infrastructure for the Region: Gulf telecoms are racing to build “data highways” that bypass Red Sea chokepoints; Qatar’s Ooredoo says its Fibre in the Gulf cable will link Oman, Iraq and Turkey to Europe, reinforcing Iraq’s role in future connectivity. Kurdistan Security & Economy: The Netherlands says its forces will remain in Iraq to train the Peshmerga and Iraqi army, while Kurdistan continues to feel the economic squeeze as the US-Iran standoff persists. Local Business Signals: Iraq’s WTO accession file update and ongoing energy projects (including LNG terminal work) point to longer-term trade and investment planning even as near-term risks rise.

Iran-Hormuz Pressure on Iraq’s Economy: Iran’s new security chief Mohsen Rezaei says the Strait of Hormuz stays closed until the US ends the war and releases frozen assets, keeping oil and shipping risk elevated for Iraq. Oil & Gas Development: Iraq plans to lift Ajeel field gas output in Saladin to about 300 million standard cubic feet per day, weighing whether North Gas Company can process the extra volumes. Anti-Corruption Drive: Iraq’s Federal Integrity Commission says it stopped a scheme to seize 40 dunams of state land in Anbar, while a “Dawn Crackdown” has detained 210+ officials and business figures since late June. PMF Politics: Prime Minister al-Zaidi is considering major PMF leadership changes, aiming to reduce potential military, economic, and financial fallout. Trade & Logistics: Turkish Mediterranean exporters shipped $16.8m to Iraq in July, and Jordan’s Aqaba Port saw a surge in transit containers bound for Iraq. Public Finance Debate: A proposal to double basic salaries for long-term leave workers (50% to 100%) is under review amid legal and budget concerns. Iraq’s Non-Oil Weakness: Money supply is up nearly 10% since January while inflation stays ~3%, pointing to non-oil slowdown or cash hoarding, with trade pressured by customs and transport frictions.

Hormuz Deadlock Hits Iraq’s Energy Outlook: Trump escalated the US-Iran standoff by demanding Iran pay reparations and compensation for deaths and damage, while Iran continues to link any reopening of the Strait of Hormuz to US concessions—pushing oil prices higher and clouding any near-term deal that matters for Iraq’s exports and regional trade. Kurdistan Compensation Push: Erbil submitted a detailed drone and missile damage report to Baghdad and is awaiting compensation; the KRG says attacks since February have killed and injured hundreds and cut trade by about 70%, adding pressure to an already strained economy. Security & Infrastructure Risk in Iraq: A suspected drone strike at Taji Camp is under investigation after an ammo depot blast, with reports pointing to major losses that could affect readiness and costs for the Iraqi Army. Digital & Telecom Moves: Iraq’s telecom regulator moves to shut down Korek Telecom’s network, while Apple has officially entered Iraq under a new digital services framework—both signaling continued regulatory tightening and tech expansion. Regional Security Realignment: Turkey’s parliament backed a landmark law to advance the PKK peace process, a development that could reshape security planning across Iraq’s neighborhood.

Strait of Hormuz Standoff: Iran says it won’t reopen Hormuz unless the US ends its blockade, lifts sanctions, releases frozen assets, and pays compensation—while Trump counters with demands that Iran pay reparations, worsening deal hopes and pushing crude higher. Iraq Security & Arms Control: Iraq shut 71 fake PMF (Popular Mobilization Forces) offices as part of a wider weapons registration and control drive, aiming to curb unauthorized militia branding. Iran Security Shake-Up: Supreme Leader Mojtaba Khamenei appointed Mohsen Rezaei as secretary of Iran’s Supreme National Security Council, alongside other senior military posts, signaling a harder line as talks stall. US Military Readiness: Ex-Defense chief Mark Esper warned the US is running low on Patriot and THAAD interceptors after months of war-related spending. Regional Energy Pressure: OPEC output rose in July as Gulf producers restored supplies, but Hormuz disruption continues to weigh on exports and costs. Telecom Earnings: Zain Group reported H1 2026 net profit up 73% to $717m, driven by investment gains and revenue growth. Turkey-PKK Peace Framework: Turkey’s parliament approved a conditional legal framework for PKK disarmament and reintegration, a key step in the peace process.

Strait of Hormuz Leverage: Iran says it’s close to a final shipping deal with Oman, but won’t reopen the Strait of Hormuz until the US meets six demands, including ending aggression, lifting sanctions and blockades, releasing frozen assets, and paying compensation—while the US insists it’s only “semi-negotiating” and is “low-keying” pressure via its blockade. Security Council Shake-Up: Iran’s supreme leader appointed hardliner Mohsen Rezaei as secretary of the Supreme National Security Council, replacing Mohammad Bagher Zolghadr, as Hormuz talks stall. Iraq Oil Hit: Kurdistan PM Masrour Barzani warned the closure has disrupted Iraqi oil exports and raised economy-wide pressure, with shipping disruptions also pushing firms to reroute trade. Shipping Costs Spike for Iraqi Crude: Reliance agreed to pay $23m–$25m to move two million barrels of Iraqi crude, reflecting surging freight as shipowners avoid Hormuz risk. Regional Finance Pressure: Reports say Hezbollah is facing its worst financial crisis in years as tighter banking squeezes funding, affecting its welfare and military spending. Digital Payments Push: Iraq’s banking and customs digital transformation continues, with new work on a digital payments framework and broader self-service terminal deployments across the region.

Strait of Hormuz Pressure on Iraq’s Economy: Iran’s Revolutionary Guards say Hormuz will stay closed until the US meets six demands, including lifting sanctions, ending the naval blockade, unfreezing assets, and paying compensation—keeping Iraq’s crude exports under strain as officials report exports down to about 1.5–1.7mn bpd from 3.4mn bpd, pushing Baghdad to diversify routes. Kurdistan Trade Hit: KRG PM Masrour Barzani says trade activity has fallen over 70% since the US-Iran war began, with missile/drone attacks disrupting investment and cross-border commerce. Anti-Corruption Crackdown: Iraq’s “Dawn Crackdown” continues with arrests tied to alleged misuse of public contracts, including detention of Oil Ministry-linked figures and a court summons/wanted listing for former finance minister Taif Sami. Digital Push for Finance & Customs: Iraq is accelerating digitization of banking and customs, aiming for tighter electronic payments and data links to improve transparency and ease business. Telecom Shock: Korek Telecom faces a potential operational shutdown after Iraq’s CMC moves to suspend services, while Korek disputes the regulator’s authority. Water Tech Deal: Iraq’s Water Resources Ministry signed with Turkish firm Kolaysoft to digitize water monitoring, including remote sensing and GIS mapping. Local Business Disruption: Baghdad’s Al-Madina Stadium is declared unfit for matches, disrupting the start of the 2026/27 Iraq Stars League.