AGP Executive Report

Iraq–Jordan Security Talks: Jordan’s PM told Iraq’s parliament speaker that Iraq’s security is a “fundamental pillar” for regional stability, warning Amman is increasingly concerned about armed non-state activity inside Iraqi territory. Gulf Shipping Under Pressure: As the Strait of Hormuz remains a flashpoint, reports say tanker traffic has collapsed and operators are using “dark mode” tactics; Kuwait Petroleum also reportedly offered crude to Asian buyers directly for the first time since the 1990-91 war. Iran-US Nuclear Deal Signals: The US says a memorandum of understanding with Iran could be signed soon, while Iran’s media and officials dispute whether a draft is finalized—keeping nuclear enrichment and sanctions as the core sticking points. Iraq Oil Output Snapshot: OPEC data cited in regional reporting shows Iraq production rising to about 1.759 million bpd in May, up from April. Agrifood for Resilience: FAO and GEF highlighted agrifood projects including in Iraq aimed at boosting climate- and biodiversity-friendly farming while protecting rural livelihoods.

Basra-Haditha Pipeline Push: Iraq is accelerating work on its strategic Basra-Haditha crude oil pipeline, aiming to move more than 2.25 million bpd and add export flexibility via links to Jordan, Syria, and Türkiye—especially as Strait of Hormuz disruptions keep reshaping energy planning. Energy Security Shock: The World Bank cut its 2026 global growth forecast to 2.5% and warned Iraq and other energy exporters face bigger downside if Middle East supply disruptions and market stress deepen. Hormuz Trade Reality Check: Reports say the Strait of Hormuz is “open” but not fully—commercial traffic is adapting with tighter enforcement and riskier routing, while LPG flows still slip through under pressure. Regional Security Focus: Jordan’s PM stressed that Iraq’s security is a pillar of Jordan’s own stability, with border and airspace risks and non-state armed activity inside Iraq highlighted as key concerns. Oil Market Signals: Crude futures fell after Trump signaled possible progress on an Iran deal, adding to the week’s volatility for Gulf-linked supply chains.

Oil Refining Push: Iraq’s Ministry of Oil is moving ahead with projects to raise domestic refining capacity in Diwaniyah, Maysan, Najaf and Anbar, while Basra’s FCC unit is already producing 4–5 million liters of enhanced gasoline daily to cut imports and stabilize local supply. Regional Trade & Logistics: Aqaba ports reported 38% growth in handled cargo volume from the start of 2026 to the first week of June, reaching about 2.8 million tonnes, with transit shipments to Iraq a key driver. Macroeconomic Pressure: The World Bank cut its 2026 global growth forecast to 2.5%, warning Iraq and other energy-exporting economies face bigger downside if Strait of Hormuz disruptions worsen and financial stress rises. Security & Diplomacy: Iraqi PM Ali al-Zaidi urged stronger Baghdad-Damascus security and economic coordination, as Iraq also pushes to consolidate state control over weapons amid PMF reform. Energy Market Shock: OPEC+ output fell further below targets in May, with Iraq among the biggest underproducers, as regional conflict continues to disrupt production plans.

Iraq Security & State Control: Iraq reiterated its push to keep weapons in the hands of the state, linking disarmament of Iran-backed armed groups to a September deadline tied to the end of the US-led ISIS coalition mission, while warning factions against making militia participation part of government bargaining. Regional Energy Shock: Iran’s move to “close” the Strait of Hormuz and US strikes that followed are again rattling oil flows that Iraq depends on for exports and trade routes, with OPEC output in May falling to the lowest since at least 2000 as blockade and maritime disruption hit Gulf supply. US-Iran Diplomacy Pivot: The US signaled it may pursue a nuclear deal with Iran without waiting for Israeli approval, while Trump also claimed a secret US mission helped move more than 100 million barrels through Hormuz—raising pressure on negotiations. Finance for Postwar Reconstruction: JP Morgan said it has deployed over $20bn into the Gulf since the Iran war began and expects far more capital needs for rebuilding and diversification. Cross-border Operations: A report says Israel deployed special forces including in Iraq during the Iran conflict, adding another layer of regional risk for Iraq’s industry and logistics environment.

Iraq Security & Militias: Iraq set an end-September deadline to disarm Iran-backed armed groups and fold weapons under state control as the US-led ISIS mission winds down, while some factions link disarmament to the timing of foreign troop withdrawals. Regional Trade & Transport: With the Strait of Hormuz under pressure, Turkey and Saudi Arabia signed rail and logistics agreements to revive the Ottoman-era Hejaz Railway as an overland alternative; Iraq may join later. Oil Market Shock: OPEC output in May fell to the lowest in over two decades amid the Iran war and blockade effects, adding to pressure on Gulf export routes and energy prices. Iraq Economy Plan: Iraq’s Coordination Framework reportedly backed Prime Minister Ali Al-Zaidi’s $83B economic reform push, including a major shift in the official exchange-rate approach and anti-graft measures. Agribusiness & Startups: Mabiati and Al Jabal Agriculture secured six-figure Iraqi investor funding to expand digital commerce and AI farming services. Health Watch: Iraq’s Ministry of Health reported 145 hemorrhagic fever cases and nine deaths since early 2026, with Dhi Qar the hardest hit. Infrastructure: Anbar says legal and technical steps are done for the al-Ramadi–Nukhaib desert highway to the Saudi border, pending cabinet approval.

Strait of Hormuz Disruption: Crescent Petroleum CEO Majid Jafar warned the Gulf crisis has turned into a whole-economy shock, hitting not just oil and LNG but fertiliser, helium for semiconductors, shipping, food and manufacturing—direct energy damage already above $60bn and trade losses past $150bn. Iraq Export Diversification: Iraq and the UAE are pushing alternative routes as Hormuz remains constrained; Baghdad approved expanding crude exports via the Kurdistan–Turkey pipeline toward Turkey’s Ceyhan port, while the UAE accelerates the Abu Dhabi–Fujairah West–East pipeline to bypass the chokepoint. Regional Security Link: Jordan’s PM told Iraq’s parliament speaker that Iraq’s security is a pillar of Jordan’s stability, stressing concerns over drones and non-state armed groups operating from inside Iraqi territory. Iraq Industry & Finance: Fitch said APAC corporate credit risks are widening from the Iran-linked energy shock, with selective downgrades tied to Iraq exposure and weaker leverage headroom. Maritime Incident: A US missile strike off Oman led to a rescue of 24 Indian crew after a distress call from the tanker MT Marivex, previously sanctioned over alleged Iranian oil blockade violations.

Energy & Trade Disruption: Oil markets are reacting to the Strait of Hormuz shock, with the U.S. EIA warning OECD oil stockpiles could fall to the lowest levels since 2003 as inventories are drawn down and traffic stays below pre-conflict levels. Market Outlook: Fitch says the surge is likely a temporary logistical shock, projecting Brent around $87 in 2026 if Hormuz reopens by late July, though it also flags potential oversupply later in the year. Iraq’s Export Pressure: Iraq is accelerating work to reroute exports away from Hormuz, including boosting shipments via the Kurdistan–Turkey pipeline network, as the blockade continues to choke crude flows. Regional Connectivity: Saudi Arabia and Türkiye signed rail and logistics cooperation MoUs aimed at building a land corridor linking the Gulf to Europe through Syria and Jordan—routes that could matter for Iraq’s broader trade options. KRG Salaries: Iraq’s parliament debate over Kurdistan civil servant pay intensifies, with officials calling salaries a “red line” tied to court rulings.

Iraq–Jordan Energy Security: Jordan’s PM Jaafar Hassan met Iraq’s Parliament Speaker Heibat al-Halbousi, stressing that Iraq’s security is inseparable from Jordan’s and flagging cross-border drone and militia risks. The talks also highlighted cooperation to extend Iraq’s oil pipeline through Jordan as a mutual economic win. Power Sector Under Strain: With Iran halting gas supplies amid the Iran–Israel escalation, Iraq is bracing for a harsher summer grid crisis. Baghdad has started buying electricity from Turkey and Iraqi Kurdistan, but analysts say the deeper problem is long-term damage, corruption, and dependence on imported gas. Oil Export Diversification: Iraq says it is boosting exports via the northern route, including lines linked to Syria, targeting up to 650,000 bpd through these outlets to cut reliance on Hormuz-linked maritime risk. Regional Shipping Shock: The Strait of Hormuz closure is already disrupting logistics, with carriers freezing bookings and rerouting cargo away from Bahrain, raising costs and forcing land-bridge alternatives. Industry Tech Signal (Iraq-linked): A China–Iraq lab on oil and gas energy and CCUS was referenced alongside global moves toward digital oilfield monitoring, underscoring the push for efficiency and emissions control in energy operations.

Iraq-Jordan Security Ties: Jordan’s PM Jaafar Hassan met Iraq’s Parliament Speaker Heibat al-Halbousi, stressing that Iraq’s security is a pillar of Jordan’s stability amid drone and cross-border threats and growing concern over non-state armed activity inside Iraq. Oil & Pipelines: Jordan’s Senate speaker and Iraq’s parliament speaker also backed extending the Iraqi oil pipeline through Jordan as a shared economic benefit, keeping energy cooperation high on the agenda. OPEC+ Output Signal (with a catch): OPEC+ agreed to raise July oil output by 188,000 bpd, including Iraq’s 26,000 bpd share, but analysts warn the Strait of Hormuz situation may limit real market impact. Regional Energy Shock: Coverage highlights how Hormuz disruptions are reshaping shipping costs and trade routes, pushing governments to diversify logistics and energy supply. Iraq in the War Spillover: Reports say Iran-linked groups in Iraq have threatened US bases after renewed Israel-Iran exchanges, while Iraq and Syria moved to restrict airspace as tensions rose. Energy Policy Watch: A separate item notes Iraq’s weekly oil exports to the US resumed after earlier disruptions, underscoring how quickly flows can change with regional security.

OPEC+ Energy Push: OPEC+ agreed to raise July oil output targets by 188,000 bpd for the fourth straight month, but analysts say it may deliver little real supply while the Strait of Hormuz stays disrupted by the Iran conflict. Iraq Oil Exports: Iraq’s weekly crude exports to the US resumed at about 43,000 bpd after a prior complete halt, according to US EIA data. Regional Security Ties: Jordan’s PM said Iraq’s security is a pillar of Jordan’s security, warning that non-state armed groups operating from Iraqi territory are a growing concern. Iraq Airspace Disruption: Iraq shut all airspace as the regional crisis deepened, leaving flights grounded amid escalating Israel-Iran exchanges. Industrial Spotlight: Egypt’s PM inaugurated and inspected multiple Alexandria projects, including a new Lipton Teas & Infusions production line, as part of a broader push to localize manufacturing and expand jobs. Archaeology & Engineering Heritage: In Saladin, an Iraqi team revived interest in the Al-Jabbar Well and fortress, using drones and professional documentation to highlight advanced local engineering knowledge.

OPEC+ Oil Policy: OPEC+ ministers agreed to lift July quotas by 188,000 bpd (Saudi Arabia and Russia +62,000 each; Iraq +26,000; Kuwait +16,000; Kazakhstan +10,000; Algeria +6,000; Oman +5,000), but analysts say it’s mostly a signal because the Strait of Hormuz remains closed and physical barrels can’t move freely. Iraq Energy Investment: Iraq’s new oil minister Bassim Mohammed Khudair pledged better terms for foreign investors and aims to expand production beyond traditional southern fields, cut associated gas flaring, and build the pipeline and export infrastructure needed to reach full oil and gas capacity. Integrity & Infrastructure: Iraq’s Federal Integrity Commission says it uncovered violations in a 4.24 billion-dinar Kirkuk road-paving project, including reduced concrete thickness and missing BRC reinforcing steel, arresting the project’s lead engineer and referring the case to court. Aviation Upgrade: Iraq’s Transport Ministry confirmed ground support equipment has been delivered for Nasiriyah International Airport ahead of its opening, targeting improved passenger capacity and supporting the wider Development Road push. Regional Security Pressure: Iran escalated threats tied to Lebanon and the U.S. naval blockade, warning that bases and assets in the region could be treated as “legitimate targets,” keeping energy and logistics risk high.

Roads Upgrade: The World Bank is backing a $900 million initiative to upgrade Iraq’s road infrastructure, aiming to strengthen transport corridors, improve safety, and boost trade and private-sector opportunities, with millions of Iraqis expected to benefit. Oil Transit Dispute: Iraq’s Oil Ministry denied claims that Baghdad pays Iran for tanker passage through the Strait of Hormuz, saying exports continue under international rules via the State Oil Marketing Organization. Hormuz Shock to Industry: With the Strait still largely restricted since Feb. 28, OPEC+ is set to meet on higher quotas, but analysts warn geopolitical realities may limit any impact on prices—keeping pressure on Iraq’s energy-linked costs and logistics. Agriculture Hit: A fire destroyed about 10 dunams of wheat near Taza Khurmatu in Kirkuk, as farmland blazes continue during harvest season. Safety Enforcement: Iraq’s civil defense says it closed around 11,000 buildings over the past year for safety violations, highlighting ongoing risks that can disrupt construction and local commerce.

Iraq Energy & Trade: Baghdad denied paying Iran for oil tankers to pass through the Strait of Hormuz, saying exports move via internationally recognized routes under legal oversight. Safety & Construction: Iraq’s civil defense closed about 11,000 buildings over the past year for fire and safety violations, with Anbar leading, followed by Basra and Baghdad’s Rusafa. Power & Renewables: With blackouts and fuel disruptions rising, more households in Iraq are turning to solar as a backup to generator-heavy living. Regional Shipping Pressure: New US-Iran strikes and drone activity around the Gulf keep pressure on maritime traffic tied to Hormuz, raising costs and uncertainty for energy flows. Business & Exports: Iraq-linked trade activity shows up in regional export documentation, with certificates of origin from the Amman Chamber of Commerce highlighting Iraq among key destinations. Industry Context: The EBRD says it will keep scaling support for conflict-affected economies, including Iraq, to help stabilize businesses and financial sectors.

Power & Energy Resilience: Iraq’s summer blackouts are pushing more households toward solar. A Baghdad family says generator use is becoming too costly, especially after Iran cut gas supplies following regional attacks, while experts estimate private solar installs at 5–10 million dinars. World Bank & Infrastructure: The World Bank approved a $900m project to upgrade Iraq and Kurdistan road networks, aiming to improve safety, reliability, and trade links across major corridors. Oil Market Pressure: OPEC output fell to a multi-decade low as the US blockade tightens pressure on Iran and disruptions hit the Strait of Hormuz, with Iraq among the affected producers. Sanctions & Fuel Smuggling: OFAC sanctioned a network shipping Iranian LPG disguised as Omani fuel to South and East Asia, using UAE/China front firms and shadow shipping to evade sanctions. Maritime Security: Reports highlight how tankers increasingly “go dark” by switching off tracking to slip through Hormuz amid attacks and tighter enforcement. Nuclear Safety Alarm: The IAEA called the Barakah nuclear plant attack a serious compromise of nuclear safety, with regional states reiterating condemnation and support for technical safeguards.

World Bank Funding: The World Bank has approved a $900m package to upgrade Iraq and Kurdistan Region road infrastructure, targeting key corridors linking Baghdad with Turkey via Kurdistan and with Syria/Jordan, with roads carrying 90% of transport but suffering deterioration and safety risks. Fuel Supply Oversight: Iraq’s Integrity Commission launched surprise field teams to monitor gasoline distribution in Baghdad and other provinces, checking depot deliveries versus sales to curb smuggling and manipulation amid ongoing shortages. Oil Export Shock: Iraq’s crude exports averaged about 329,000 bpd in May, with Gulf shipments squeezed by the Strait of Hormuz restrictions, while the Kurdistan-Ceyhan pipeline helped offset only part of the drop. Water for Agriculture: After drought years, rising Euphrates flows in Babil are reviving fishing and improving prospects for agriculture and livestock grazing. Nuclear Safety Alarm: The IAEA warned that a drone attack on the UAE’s Barakah nuclear plant was a serious compromise of nuclear safety, calling such attacks unacceptable. Regional Security Spillover: Reports say Israel used covert sites across the region during the Iran war, including alleged positions in Iraq, alongside broader Iran-US maritime tensions.

Energy & Shipping Shock: Iranian crude and condensate exports fell to a six-year low in May, with analysts pointing to the U.S. naval blockade and Strait of Hormuz disruption that’s also hitting regional exporters and insurers. Iraq Oil Exports & Routes: Iraq is pushing to restart and expand oil output and exports via alternative corridors, including Turkey’s Ceyhan route and plans tied to Development Road logistics. Kurdistan Oil Operations: Baghdad and Kurdistan Region authorities are moving to resume oil operations and exports, with Ceyhan-linked arrangements highlighted as key for revenue stability. State Control & Security: Iraq’s government is intensifying efforts to centralize weapons under state authority and tighten ties with armed groups, signaling a major shift in how security and industry-linked stability are managed. Trade Policy Pressure: The U.S. proposes forced-labor-related tariffs that include Iraq, adding new compliance risk for Iraqi exporters. Basra Border Move: Basra is set to inaugurate Iraq’s largest border crossing with Iran next week, a practical step for cross-border trade flow amid regional tension. Business & Infrastructure: Turkey is discussing reviving the Hejaz Railway and extending it toward Oman as an alternative trade corridor to reduce chokepoint dependence.