AGP Executive Report

Saudi-Iraq-linked oil shock: Air strikes hit Riyadh’s main airport and an oil depot after attacks tied to Iraqi militants and the Houthis damaged Saudi oil infrastructure, raising fears for global supply and pushing markets higher. Central Bank of Iraq: The CBI says it has enough foreign reserves to cover dollars for trade, card payments and travelers even as the dinar slides in the parallel market; it also reported reserves down nearly 17% in the first seven months of 2026. Currency pressure: The dinar’s plunge and dollar moves remain a live concern for Iraq’s economy. Security in Iraq: Forces launched a desert sweep between Baiji and Haditha to hunt ISIS after clashes near a power transmission tower, while separate operations targeted ISIS and drug trafficking networks in southern areas. Kurdistan politics: KDP and PUK stepped up efforts to form a new Kurdistan Region government and reactivate constitutional institutions. Coalition exit and sovereignty: Iraq says the Sept. 30 end of the US-led coalition mission is a sovereignty milestone, while PM al-Zaidi is set to ask Trump for more time on sanctions tied to weapons control. Daily life and services: Iraq’s textbook printing bill is estimated at 150–200B dinars, and Iraq’s education committee warns shortages and delayed curriculum updates ahead of the new school year.

US-Iran War Fallout: The Pentagon’s public tally for the Iran war is under fire after the Washington Post reported at least 22 US troop deaths, higher than the official 18, with Democrats demanding answers and Defense Secretary Pete Hegseth calling the claims “a complete lie.” Regional Security & Iraq: Iraq says the Sept. 30 end of the US-led coalition mission against ISIS will mark a “sovereign milestone,” shifting to bilateral ties based on Iraqi control. Counterterror Operations: Iraqi forces foiled an ISIS attempt to damage a power transmission tower between Baiji and Haditha, then launched searches and tightened protection of critical infrastructure. Sinjar Disarmament: Iraq announced the Yazidi YBS armed group will disarm and integrate qualified members into Iraqi security forces, aiming to stabilize Mount Sinjar and support displaced families. Economy & Governance: Iraq set customs rates for medicines (0.5%) and vitamins/supplements (5% or 10%), after earlier tariff confusion. Kurdistan Development: Leaders met at a Sulaymaniyah summit focused on investment, economic diversification, and public-private partnerships, with hopes for improved political climate in the region.

Airspace Reopened: Iraq has fully restored civilian use of previously restricted western airspace, ending military reservations that had been in place since 2016–2017 and paving the way to update aviation guides for global airlines. Energy Pressure From the Region: The wider Middle East crisis keeps feeding oil shocks, with reports of Russia’s ESPO blend topping $120 a barrel for China as Saudi pipeline disruptions and Iran-linked retaliation tighten supply. Iraq’s Diplomatic Push: Iraq’s government says it has signed 63 foreign deals in four months to attract investment and expand partnerships, though analysts warn turning signatures into real projects is the hard part. Security and Withdrawal Logistics: The US has begun moving heavy equipment and air-defense assets out of Iraq toward Jordan as the September 30 exit deadline nears. Kurdish Politics: Kurdish leaders continue debating the next phase of struggle and governance, stressing political and diplomatic strategy while linking any disarmament talks to guarantees for Kurdish gains.

Iraq-US ties: Iraq’s prime minister is set to meet President Trump next week on the sidelines of the UN General Assembly, as Washington and Baghdad signal a major shift in relations. Regional security: Iran’s top security official renewed deep mistrust of the US and demanded practical steps, while Iran and Iraq also discussed border security and joint probes tied to drone-launch sites. Oil and transport: Iraq and Uzbekistan held talks on a draft road transport agreement, and Iraq continues work to diversify export routes, including storing oil in Kirkuk to move exports via Turkey’s Ceyhan. Kurdistan politics: Kurdistan leaders pushed for fairer federal allocations based on population and called for unity to defeat current threats. Tech and daily life: iCloud+ now bundles Apple TV and Apple Arcade for Sri Lankans, with Iraq listed among the countries getting the upgrade. Business and culture: Allo Beirut plans to open in Baghdad, and Iraq’s novelist Inaam Kachachi won a Best Columnist Award.

Kurdistan Budget Fight: PM Masrour Barzani says the Kurdistan Region’s federal allocations must match its census population share of 14.14%, rejecting Baghdad’s lower 12.68% figure and warning it’s “unfair.” Diplomacy in Focus: Iraq appointed Krikor Der-Hagopian as its new U.S. ambassador, aiming to deepen political, economic, energy and security ties after PM Ali al-Zaidi’s Washington visit. Security & Courts: Kirkuk resident doctors suspended work over unpaid dues and 2027 budget demands, while a Karbala court sentenced a man to three years for impersonating a PMF brigadier general to extort money. Regional Fallout: Iraq’s probe into drone attacks tied to the Saudi East-West pipeline continues as the wider Iran-linked conflict tightens pressure on Gulf energy routes. Sports: Iraq named a 26-man squad for the Gulf Cup in Jeddah, with captain Aymen Hussein included, as the team opens Group A against Kuwait, Oman and hosts Saudi Arabia.

Red Sea Pressure: Houthis seized Mocha and advanced toward Bab el-Mandeb, tightening their grip on the key shipping chokepoint and raising fresh fears for global trade as Saudi airstrikes and retaliatory attacks widen the Yemen conflict. Iran-US Fallout: Leaked photos and a Pentagon inspector general assessment point to major damage at US bases from Iranian missile and drone strikes across the region, with claims that some losses were not fully communicated to the public. Iraq-Saudi Energy Shock: Oil markets reacted to disruption after Saudi pipeline attacks tied to drones launched from Iraq, while analysts warned the Red Sea is becoming a “hot war zone” that could keep flows under pressure. Iraq Economy & Finance: EBRD extended a $25m trade finance facility to Bank of Baghdad to boost cross-border lending, and Iraq is considering a new banknote series to curb counterfeits and pull hoarded cash back into the system. Agriculture Deals: Iraq’s agriculture ministry held talks with a UK firm on tissue-culture date palm propagation and with the Iraq Britain Business Council on wider horticulture and desertification control cooperation. Sports: Graham Arnold named Iraq’s squad for the 27th Gulf Cup in Jeddah, aiming for a title run.

Iraq-Saudi Fallout: Iraq is scrambling after drone attacks shut Saudi Arabia’s East-West pipeline, with Riyadh blaming an Iraqi militia and Baghdad confirming a drone launch site near the Iran border while investigating and sacking a commander. Regional Security: Saudi Arabia says it intercepted a Houthi drone aimed at Mecca, calling the holy site a “red line,” as the Houthis deny targeting it and Yemen’s fighting widens. Energy Pressure: Saudi cancels some oil shipments to Europe and suspends Red Sea loadings, while CENTCOM says the Strait of Hormuz “remains open” despite rising risks. Diplomacy & Terror Links: Türkiye and Iran discuss cooperation against PKK/PJAK and border security, urging joint action with Iraq and Syria. Humanitarian Returns: Iraq’s Ministry of Migration says 30,000 displaced people have returned to Sinjar, with about 19,000 families still in camps. Iraq Military Modernization: Iraq requests Bell 412EPX and 407M helicopters with weapons and training to diversify rotary-wing capabilities. Economy: Germany reports exports to Iraq rose to about $669M in the first half of 2026.

Red Sea Security Shock: Saudi air defences intercepted and destroyed a Houthi drone south of Mecca before it entered restricted airspace, with Riyadh calling the holy sites a “red line” while the Houthis deny targeting the city. Oil Route Fallout: The wider Red Sea crisis is feeding into energy disruption fears after Saudi Arabia blamed drone damage for shutting its East-West pipeline, with reports of cancelled or suspended crude loadings and pressure on global prices. Iraq’s Security Test: Iraq is facing mounting scrutiny after investigations tied the Saudi pipeline attack to launches from Iraqi territory, while Baghdad scrambles to control armed factions ahead of a US withdrawal deadline. UN Yemen Warning: The UN warned the Yemen conflict is destabilizing the Bab el-Mandeb Strait and threatening civilians and navigation. Local Governance/Corruption: In Dhi Qar, Nasiriyah municipality director Mohammed Jabbar Dhaif is believed to be in hiding after anti-corruption court arrest warrants, as probes widen into land manipulation.

Saudi-Iraq Tensions: Iraq says it has found suspected drone launch sites tied to the Saudi pipeline attack and is probing the incident as it temporarily closed Iran border crossings; a lawmaker also claims Prime Minister Ali Al-Zaidi averted planned US-Saudi strikes. Energy Shock: Oil prices jumped as Saudi Arabia shut its East-West pipeline for weeks after drone damage, while Houthi attacks and alerts hit cities including Mecca and Taif, raising fears for Red Sea and Hormuz shipping. Pentagon Watchdog: A US inspector general report says Iran strikes damaged hundreds of US base structures across eight countries and drove munitions shortfalls, with war costs reaching about $33.4 billion by June 29. Iraq Economy & Services: Iraq launched its first university mental health guide, while Diyala reported fuel shortages easing next week and Baghdad markets saw the dollar around 157,000 dinars per $100. Deals & Trade: Iraq and France signed defense and energy agreements; TotalEnergies is seeking a stake in a $15B Iraq-to-Mediterranean pipeline project, and Iraq explores LNG imports via TotalEnergies. Kurdistan Politics: The New Generation Movement says it will not join the next KRG government despite an alliance with the PUK.

US-Iran War Fallout: The Pentagon’s inspector general says the Iran war has driven a major US ammunition shortfall, citing “strategic inventory shortfalls” and industrial bottlenecks, with Operation Epic Fury costing about $33.4bn and $22.3bn spent on expended munitions. Regional Security & Iraq Link: The same conflict backdrop keeps spotlight on Iraq as a suspected launch area for drones tied to attacks on Saudi infrastructure, while the US and allies press for tighter controls. Saudi Energy Pressure: Saudi Arabia’s East-West oil pipeline is shut for weeks after drone damage, with repairs expected to take three to five weeks—raising fresh global supply fears as Houthis step up strikes and Hormuz talks stall. Diplomacy & Appointments: Trump nominates Rep. Wesley Hunt as US ambassador to Saudi Arabia, as Gulf states postpone Strait of Hormuz discussions with Iran. Local Human Impact in Iraq: A Baghdad police commander’s killing has again exposed Iraq’s housing crisis, with illegal land encroachment and land-mafia influence blamed for worsening shortages.

Oil & Diplomacy: Iraq’s PM Ali al-Zaidi met France’s Macron and TotalEnergies CEO Patrick Pouyanné in Paris, pushing gas self-sufficiency and higher output, while Iraq and France signed defense, gas, aviation, youth, research and innovation deals. Energy Shock: Brent jumped near $108 after Saudi’s East-West pipeline was hit by drones blamed on Iraq, with repairs expected to keep it out for weeks and raising fears for global supply as Hormuz talks were postponed. Regional Security: Five missiles struck Sulaymaniyah early Monday, targeting Iranian Kurdish opposition camps, with no casualties reported; separate reports say missiles also hit Komala families’ camp in Iraqi Kurdistan. Banking & Currency: Iraq’s banking adviser said regulators see no risk to depositor funds, while the US dollar traded around 157,000 IQD per $100 in Baghdad and Erbil. Local Justice: An Iraqi court sentenced a Najaf butcher to 10 years for selling pork as beef in the holy city. Trade Links: Turkey’s exports to Iraq topped $5.76B in Jan–Aug 2026, making Iraq its biggest buyer among neighboring markets.

Strait of Hormuz Diplomacy Stalls: Oman postponed a key Iran–Gulf foreign ministers meeting in Salalah, citing the need for consensus, as Bahrain boycotted and no new date was set—leaving talks on reopening Hormuz shipping in limbo. Oil Supply Shock: Weekend attacks and the shutdown of Saudi Arabia’s East–West pipeline—reportedly hit by drones launched from Iraq—pushed Brent above $107 and kept markets jittery over wider disruptions. Fresh Attacks Raise the Stakes: UK maritime monitors reported a projectile strike on a vessel transiting Hormuz, while Saudi state media showed damage from attacks in Jazan; Iran also reported casualties from a ship strike near Qeshm. Regional De-escalation Calls: Iraqi and UAE foreign ministers urged peaceful resolution and coordination to prevent escalation, as Baghdad says it is taking steps to stop attacks launched from its territory. Iraq Developments: Iraq reported phased reopening of Iran border crossings and discussed AI infrastructure planning, alongside oil export targets and new power projects in Kurdistan.

Border Reopening: Iraq announced a phased restart of three Iran crossings—al-Sheeb and Shalamcheh for passengers from Sunday, with trade and the remaining crossings to resume on set days—after security and technical reviews tied to drone attacks near the Saudi pipeline. Saudi Pipeline Fallout: Baghdad says drone launch activity linked to the Saudi East-West pipeline attack originated from Iraq’s Maysan province, after which it closed crossings and seized a drone launch platform used in the strike. Regional Diplomacy: Iraq’s PM Ali al-Zaidi is pushing Europe ties on a France-Germany trip, while Iran and Gulf states are set to meet in Oman on Strait of Hormuz shipping; Bahrain says it won’t attend. Fuel Pressure at Home: In Duhok, drivers reported hours-long waits for subsidized gasoline as shortages persist. Governance & Security: A Coordination Framework source says PM al-Zaidi received an “extensive” report on restricting weapons to state control and addressing armed factions. Environment Watch: Iraq ranked second-lowest among Arab states in the 2026 Environmental Performance Index.

Saudi-Iraq Pipeline Fallout: Iraq confirmed drones that hit Saudi Arabia’s vital East-West crude pipeline were launched from Iraqi territory, ordered an investigation, and dismissed senior security officials in Maysan; Riyadh shut the pipeline “as a precaution,” while Trump said Iran was “probably” behind the attack. Border Crackdown: Baghdad closed three Iran crossings (Shalamsheh, al-Shib, al-Mandali) to track perpetrators and stop drone smuggling, and later agreed to a joint probe with Iran into suspected launch sites. Regional Tensions at Hormuz: Iran and Oman agreed on new Strait of Hormuz entry/exit routes, but Tehran said the strait won’t reopen unless its conditions are met; meanwhile a projectile struck a vessel in the Strait, adding to shipping and oil-supply fears. Yemen Escalation: Fighting intensified as Yemeni forces hit Houthi positions and convoys, while the Houthis’ Red Sea advances keep pressure on Bab el-Mandeb, tightening the energy chokehold across the region. Diplomacy Calls for Restraint: Iran, Iraq and Türkiye urged restraint to prevent escalation, as ministers discussed border security and a planned Oman meeting with Gulf states.

Saudi-Iraq Pipeline Crisis: Saudi Arabia shut its East-West oil pipeline after drones hit the Riyadh and Medina areas, and Riyadh says the drones were launched from Iraq; Baghdad confirmed the attacks originated from Maysan province, launched investigations, and dismissed the Maysan operations commander while also removing the police chief and transferring security agency directors. Regional Fallout: Iraq closed several border crossings with Iran as an “economic penalty,” and approved a joint probe with Tehran into drone launch sites near the border; the UAE and other Gulf states condemned the attacks, while the Iraqi Islamic Resistance denied involvement. Political Messaging: Iraqi President Nizar Amidi and Parliament Speaker Halbousi both rejected using Iraqi territory or airspace as a launchpad for attacks on neighbors, stressing state control of arms and legal action. Energy Deal at Home: In Erbil, Iraq signed a 25-year contract to boost production at the Ajil oil field, aiming to raise oil and gas output. Corruption Crackdown: Iraq’s integrity commission detained four Babil officials over alleged fictitious and overpriced vehicle repairs.

Red Sea Tensions: Houthis seized Perim (Mayun) Island in the Bab al-Mandab Strait, tightening their grip on the key shipping lane linking the Red Sea to the Gulf of Aden. Saudi Energy Shock: Saudi Arabia temporarily shut its East-West oil pipeline after drone attacks hit the Riyadh and Medina regions, injuring people and damaging infrastructure, with satellite images showing smoke near the route. Iraq Blames Probe, Riyadh Holds Fire: Saudi foreign ministry said the drones were launched from Iraq, but Riyadh chose not to retaliate “at this stage” after a request from Iraq’s prime minister; Baghdad condemned the attack, dismissed a senior commander in Maysan, and launched an investigation, including a temporary closure of the Shalamcheh border crossing with Iran. Regional Diplomacy: Iran said it is preparing a foreign-ministers meeting in Oman next Monday to discuss safe navigation in the Strait of Hormuz with Persian Gulf states, including Iraq.