AGP Executive Report

Industrial Land Allocation: Iraq’s Prime Minister Ali al-Zaidi ordered authorities to allocate 250 hectares per province for industrial projects (and separately 100 hectares per province), targeting priority sectors like food processing, pharmaceuticals, and construction materials, while also banning exports of some metal raw materials to boost local manufacturing. Anti-Corruption Crackdown: Iraq’s anti-corruption court sentenced the deputy oil minister for distribution affairs, Ali Al Bahadli, to seven years and imposed multimillion-dollar fines, alongside a former MP, Talal Al Zubaie, in separate cases tied to illicit gains and money laundering. Oil & Energy Operations: Kurdistan resumed oil production at most fields after drone attacks, reaching up to 230,000 bpd (with Sarsang still damaged), as Iraq pushes alternative export routes amid Hormuz disruption. Water & Agriculture: Increased Euphrates flows from Syria have reached Iraq’s Anbar province, with officials saying levels are under control; in Duhok, sumac harvesting is underway across millions of trees, with demand from Europe and the US supporting prices. Security & Urban Management: Baghdad will deploy drones to detect illegal land encroachments after deadly clashes during crackdown operations in Al-Dora. Diplomacy: Iraq urged dialogue between Iran and the US to de-escalate the standoff affecting West Asia.

Baghdad Security & Land Governance: Iraq will deploy drones across Baghdad to spot and stop illegal land encroachments, forming a central committee with local teams after a deadly Al-Dora clash that killed a senior Baghdad Municipality security official and wounded others. Kurdistan Oil Restart: Iraqi Kurdistan has resumed oil production at all fields except Sarsang after drone attacks, lifting output to about 220,000–230,000 bpd as companies return to work. Banking Reform Pressure: Iraq’s banking sector is at a “critical crossroads,” with calls for stronger governance, anti-money laundering controls, bank restructuring, capital increases, and upgrades to digital payments and cybersecurity to rebuild public confidence. Energy Trade Shock: U.S. crude imports from Iraq reportedly fell to zero last week, while Iraq’s broader export recovery continues via alternative routes amid Hormuz disruption. Industry & Investment Links: Iraq is pushing closer trade and investment ties with Australia, especially in oil, energy, and food, and signed a Japan JICA water-sector MoU to improve drinking water infrastructure in central and southern provinces. Construction & Tech Partnerships: Erbil’s construction exhibition is drawing 450+ exhibitors and B2B talks focused on modern building tech, sustainable energy, and turning MoUs into on-the-ground projects.

Hormuz Tensions: Iran’s state-linked sources challenged US claims that the southern Strait of Hormuz route is “normally” operating, saying Washington is running a psychological campaign while Iran keeps defensive measures in place; Regional Trade & Energy: Iran also said any Oman-linked Hormuz understanding won’t take effect until the US honors commitments under the Islamabad MoU, keeping the strait effectively closed unless coordinated with Tehran; Industrial Push in Iraq: Al-Rutba in Anbar is pitching its water, minerals and power network to attract agricultural, industrial and logistics projects, citing assets like silica, phosphate, iron ore and electricity infrastructure plus improved security; Construction & Tech Investments: Erbil’s International Construction and Building Exhibition drew 450+ exhibitors and B2B meetings focused on modern building tech, sustainable energy and infrastructure solutions; Baghdad Environment Alert: a sulfur-like toxic odor returned across Baghdad neighborhoods, with Green Iraq Observatory pointing to untreated industrial emissions and open burning; Cross-border Industry Signals: Jordan reported industrial export growth of 8.9% to JD4.4bn in H1, with chemicals/cosmetics and construction leading—plus rising exports to markets including Iraq and the UAE.

Baghdad’s Air Quality Alert: A toxic sulfur-like odor returned across residential districts, with the Green Iraq Observatory pointing to high-sulfur fuel use in power and industrial sites, smoke from the Al-Daura refinery, and unregulated waste burning—raising fresh health fears. Energy & Industry Push: Iraq’s Ministry of Electricity says a 750MW solar project in Muthanna is moving ahead with PowerChina, targeting 250MW online before summer 2027. Housing Crisis in Focus: A deadly clash during Baghdad’s Al-Dora crackdown on unauthorized homes spotlighted Iraq’s informal settlement problem—millions of residents, weak enforcement, and stalled legislation. Basra Oil Export Strategy: Iraq’s SOMO launched a second tender to sell Basra crude outside the Strait of Hormuz, aiming to reduce chokepoint risk as regional shipping remains under strain. Regional Shipping Update: Iran and Oman agreed on a temporary corridor through the Strait of Hormuz, with reopening tied to conditions from Washington—an important signal for trade and logistics planning.

Iraq’s Housing Crisis Hits a Flashpoint: A deadly clash in Baghdad’s Al-Dora during a crackdown on unauthorized homes left a brigadier general and a security officer dead, spotlighting Iraq’s long-running informal settlement problem—millions of residents, weak enforcement, and repeated government failures to pass targeted legislation. Basra Oil Exports Climb Again: Basra crude exports reportedly hit their highest level since the Iran war began, with more tankers loading and SOMO preparing to sell pickups outside the Strait of Hormuz—an important signal for Iraq’s oil logistics and revenue stability. US Dollar Pressure on Iraq-Iran Trade: New reporting says Washington is using sanctions and dollar-system leverage to squeeze countries that keep trading with Iran, with Iraq already seeing banks targeted—raising the stakes for Baghdad’s financial and energy-linked trade routes. Legal Fallout for CACI Verdict: A US appeals court reversed a $42M verdict tied to claims of torture of Iraq War detainees, reshaping accountability pathways for contractors tied to Iraq operations.

Iran War Pivot to Sanctions: With the US-Israel war against Iran hitting six months, Washington is shifting from military action to tighter economic pressure, warning countries and firms that keep doing business with Tehran could face punishment. Hormuz Shockwaves for Industry: Strait of Hormuz traffic remains a fraction of normal, while Iran says it will only reopen under strict conditions; US claims of mine-clearing and escort support clash with reports of tanker incidents and near-stalled commercial flow. Gulf Infrastructure Race: Reuters reports Gulf states are accelerating port, pipeline, and rail investments to reduce dependence on Hormuz, with Saudi and UAE projects aimed at rerouting crude and trade. Iraq-Gulf Trade Strain: An IRIS report warns Iraq’s commercial links with Gulf partners could weaken as traders look for alternative supply chains via Turkey, even as Gulf investment in energy and logistics continues. Basra and Iraq’s Route Options: Iraq’s SOMO is pushing tenders to sell Basra crude outside Hormuz, reflecting a broader push to keep exports moving despite regional disruption. Regional Energy Outlook: GlobalData expects Middle East gas processing capacity additions to keep growing through 2030, with UAE, Qatar, and Saudi leading and Iraq/Iran supporting expansion. Iraq Security and Drones: Iraq’s security services reportedly foiled drone manufacturing attempts in Baghdad, underscoring ongoing risks for industrial and logistics stability.

Iraq–US Business Push: US envoy Steven Fagin is set to return to Baghdad to lead the US Mission in Iraq, with economic ties and investment front and center after meetings with US-Iraq Business Council executives from firms including GE Vernova, BP, and Baker Hughes. Sanctions Pressure on Iraq’s Trade: Washington’s “Operation Economic Outcast” expands Iran-related secondary sanctions, putting Iraq’s energy, border trade, and dollar-linked settlements under a sharper compliance test as bilateral trade with Iran is reported around $13bn in 2025. Energy Logistics Shock (Hormuz): With Strait of Hormuz risks still high, crude flows are creeping up via shuttle runs and ship-to-ship transfers, reshuffling who can move oil reliably—an issue directly tied to Iraq’s export options. Security & Drones: Iraq’s National Security Service dismantled an illegal drone-manufacturing workshop in Baghdad, seizing 25 drone frames and arresting three suspects amid concerns about Iran-backed militia attacks. Kurdistan Investment Drive: The Kurdistan Region granted 900 investment permits since 2019, signaling continued efforts to attract industrial and services projects despite regional instability.

Iraq Oil Exports: Iraq’s SOMO is letting buyers collect Basra Medium and Heavy crude via ship-to-ship transfers near Oman, a first since the Iran war began—aimed at easing the Strait of Hormuz bottleneck that has slashed exports and pushed steep discounts. Shipping Risk: Iran has blacklisted key shuttle-tanker vessels used for the workaround, threatening fines and detention; brokers warn refiners may shift away, raising premiums and tightening supply. Basra Pricing: Basrah Heavy and Medium crude prices fell sharply on Thursday, tracking broader global oil weakness. Fuel Demand: Diesel led Iraq’s July fuel sales, underscoring how power shortages and transport needs keep demand high for generator fuel and industrial trucking. Regional Talks: Qatar’s PM is in Tehran to revive de-escalation talks and push for Hormuz to return to pre-February status, as multiple delegations seek an off-ramp. Kurdistan Security: A suspected drone strike hit Soran’s administration in Erbil province; no casualties reported, and an investigation is underway. Industry Events: HORECA Jordan 2026 is set to bring food, hospitality and supply-chain firms—including Iraq-based participants—under one roof, signaling continued regional trade activity.

Pharma Re-entry: Iraq is moving to bring back major drugmakers, including GSK, after talks in the UAE, aiming to widen access to medicines and vaccines and boost competition on quality and price. Energy & Gas: In Basra, Iraq’s Oil Ministry and Shell discussed expanding associated gas use and boosting output of naphtha and LPG to cut flaring and secure fuel for industry and power. Oil Exports Pressure: Iraq’s federal budget revenues fell 42% in June 2026, with oil export income down sharply, while non-oil revenue rose—highlighting how commodity swings are hitting state finances. Basra Gas-to-Industry Push: The same energy push ties to Iraq’s broader plan to raise production toward 8–10 million bpd over six years, supported by deals and alternative pipeline routes. Security-Linked Drones: Iraq’s National Security Service says it seized a Baghdad drone workshop and linked key customers to Iran-backed Shiite factions, underscoring how drone production is becoming an industrial-security issue. Regional Trade: Iraq and Syria discussed expanding bilateral trade and signing new MoUs to ease cross-border procedures and remove barriers. Infrastructure: Erbil has started work on the Grand Barzani Mosque, using local engineering and resources, with a large green complex planned.

Oil & Shipping Shock: Iraq’s export routes and fuel logistics are getting hit by the wider Iran crisis as the US rolls out “Operation Economic Outcast,” warning countries and firms trading with Tehran could face secondary sanctions—while markets react to shifting Strait of Hormuz traffic and talks between Iran and Oman. Local Energy & Safety: In Diyala, investigators opened a probe after a fire destroyed three fuel tankers at an oil-protection compound near Baquba, with other recent fuel-site blazes reported across Iraq. Infrastructure Progress: Nasiriyah International Airport is 68% complete, with handover targeted for early 2027 as equipment and testing move in. Circular Economy Deal: Iraq’s GCCE and Germany’s Sutco signed a major waste-to-resource agreement in Baghdad, targeting municipal waste processing, fertilizer output, and renewable aviation fuel. Tech for Daily Fuel: Banzeeni is expanding on-demand gas delivery via a mobile app, starting in Duhok and building a digital platform for orders and tracking. Human Capital for Industry: PetroChina Iraq–West Qurna 1 is funding a scholarship program sending Iraqi engineering students to China University of Petroleum under a “0.5 + 4” curriculum.

Iraq Oil Trade: Iraq ranked fourth among South Korea’s crude suppliers in H1 2026, with shipments at 7.4% of Seoul’s imports (467.12m barrels), as Hormuz disruptions pushed more supply toward the Americas. Hormuz Pressure: Strait of Hormuz transits fell sharply, with shiptracker data putting Monday traffic at about 5m bpd versus 20m bpd pre-war, keeping global shipping and energy costs in focus. Budget for Industry & Infrastructure: Iraq plans to set aside $15bn (20 trillion dinars) in its 2027 budget to finish stalled projects, with no new-project funding, amid expectations of continued export constraints. Sanctions Risk to Iraq’s Economy: Iraqi lawmakers warn that failing to comply with the US “economic D-Day” campaign against Iran could bring heavier costs to Baghdad, given Iraq’s exposure through trade, imports, and the financial system. Diplomatic Moves Affecting Business Climate: The US is restarting staffing at some Middle East missions, including Baghdad, signaling a shift toward lower near-term escalation risk.

Sanctions & Trade Pressure: US Treasury Secretary Scott Bessent unveiled “Operation Economic Outcast,” a sweeping sanctions push on Iran covering shipping, gold, airlines, tech and digital assets, plus penalties aimed at Iran’s trading links that include Iraq. Energy Logistics: With the Strait of Hormuz under heavy disruption, TotalEnergies says it will expand Abu Dhabi’s Fujairah pipeline to create an alternative export route for Iraq-bound crude and new investment. Kurdistan Oil Output: Gulf Keystone reported Shaikan production restarting and ramping toward ~40,000 bpd after extended tripartite interim export agreements, alongside a $10m interim dividend. Iraq Infrastructure & Power: Reports say Iraq-GCC electricity grid work is delayed over security concerns, while Iraq continues pushing export routes via Turkey and other corridors. Industry & Construction Security: A CFMEU construction-industry inquiry in Australia heard allegations of tracking and intimidation tactics—an indirect reminder for Iraq’s contractors about security and compliance risks.

Sanctions Shock to Iran’s Trade Web: The U.S. Treasury unveiled “Operation Economic Outcast,” expanding secondary sanctions meant to “sever every economic lifeline” to Iran, targeting digital assets, technology, gold, aviation and shipping, with enforcement pressure aimed at Iran’s partners worldwide. Oil Market Spillover: Oil prices slid more than $2/bbl as investors weighed the new sanctions, while the Strait of Hormuz remains a central risk to supply. Iraq Oil Sector Under Reform Pressure: North Gas said Iraq’s oil-sector changes should protect workers’ rights and maintenance funding, after protests in Baghdad over new crude pricing rules that could squeeze refineries and domestic capacity. Hormuz Workarounds for Iraqi Exports: Iraq’s SOMO and QatarEnergy offered crude loading via bids that require cargoes to be loaded in/around the Strait of Hormuz, as maritime risks and insurance costs rise. Corporate Hedging on Hormuz: TotalEnergies CEO Patrick Pouyanné said shipping a supertanker through Hormuz can cost about $20 million, and the firm is backing pipeline projects to bypass the chokepoint, including an Iraq-to-Syria route. Water and Livelihoods in Babil: Improved rainfall revived buffalo herding and fishing in Babil, but UN data shows Iraq’s water recovery is still limited and climate stress continues to hit agriculture.

Strait of Hormuz Pressure on Iraq’s Exports: Shipping traffic through Hormuz stayed sharply suppressed, with fewer than 20 commodity vessels transiting over the weekend as US-Iran blockades restrict energy shipments, cutting the route’s flow to around 90% below pre-conflict levels and hitting Iraq-linked tanker movements. Iraq Oil Route Workarounds: With Hormuz access still uneven, Iraq’s SOMO is seeking customers for September Basrah Medium and Basrah Heavy cargoes, after Iran granted limited transit for some Iraqi tankers—an early test of whether traders will return to loading straight from southern ports. Customs Cash-Flow Shift: Iraq approved an advance-payment mechanism for importers starting Oct. 1, requiring estimated customs duties and tax deposits via licensed banks before foreign transfers—traders warn it could raise upfront costs and strain business. KRG Trade Facilitation: The Kurdistan Region opened a new license office at the Bashmakh border crossing with Iran to speed import/export permits, aiming to ease delays that previously required trips to Erbil amid trade declines. Regional Security Deals: Iran is reportedly considering joining a trilateral Saudi-Türkiye-Pakistan defense pact, while Iraq floated a proposal for a unified security coordination council with Tehran and Riyadh to manage trust and regional tensions. Industry & Trade Signals: Damietta’s furniture push drew inspections and visits to factories and a technology center focused on meeting European standards, while Iraq’s broader corridor logic keeps pointing to rail/road links via Türkiye to reduce dependence on Hormuz.

Oilfield Operations: Iraq’s Drilling Company (IDC) is relocating the IDC-51 rig from the Zubair oil field to East Baghdad South, aiming to drill 17 horizontal wells and boost central-region output. Energy Exports & Shipping: Iran has granted special permits for some Iraqi oil tankers to transit the Strait of Hormuz after Baghdad’s repeated requests, as Hormuz traffic remains heavily disrupted by the wider Iran-U.S. standoff. Infrastructure & Construction: Work has started on the Shorsh Bridge on the Erbil–Koy Sanjaq dual carriageway, set to be Kurdistan Region’s highest bridge at 48 meters, with 250 meters of span and multi-lane traffic. Industrial Policy & Trade: Iraq will send a gas-focused delegation to Gastech 2026 in Bangkok, seeking LNG and gas-flaring reduction know-how as the country remains among the world’s biggest flarers. Governance & Security: Iraq’s weapons-control push is intensifying ahead of a Sept. 30 deadline for all arms to be under state authority, with militia factions split over compliance. Public Safety: Kurdistan has tightened LPG and fuel-station safety rules after major fires in Sulaymaniyah, including mandatory warning and suppression systems. Human Capital in Energy: A report highlights nearly 20,000 illiterate employees in Iraq’s electricity ministry, framed as a wider sign of dysfunction in critical infrastructure.

Labor & Jobs: Employees and contract workers protested in Baghdad, Babil and Kirkuk over overdue salaries, permanent hiring demands and long-running labor grievances, including concerns about shifting a construction materials firm to an investment model. Courts & Land: Iraq’s Federal Supreme Court delayed a Nineveh land hearing until Sept. 7 in a dispute over building restrictions in areas east of Mosul, tied to allegations of demographic change. Oil Exports & Shipping: US crude imports from Iraq resumed at about 6,000 bpd after a seven-week gap, reflecting ongoing Hormuz disruptions; meanwhile Iraq is again seeking special permission for more tankers to transit the Strait. Water & Environment: Iraq Green Observatory warned that around 500 permanent pollution sources are contaminating the Tigris, with industrial waste and untreated sewage driving a worsening water and food-security crisis. Agribusiness & Food Processing: The 17th Agricultural Week opened in Baghdad, featuring mechanization, animal production and food processing, plus a 30M date palm expansion plan and tech deals. Regional Energy Diplomacy: Iraqi and Saudi ministers met in Riyadh to discuss energy security, electricity and gas cooperation, and ways to reduce reliance on Hormuz via Turkey and alternative routes. Displacement Support: A $10m UNDP-KOICA initiative launched across Anbar, Kirkuk, Ninewa and Salah al-Din to support housing, climate-resilient farming, small business grants and mental health for over 18,000 displaced people.