AGP Executive Report

UN Diplomacy & Iran Talks: US President Donald Trump warned he could “annihilate” Iran at the UN, but said US envoys met Iranian mediators and that a deal may come soon, with Tehran claiming it could reopen the Strait of Hormuz within days if US pressure eases. Iraq Energy Pressure: The standoff is feeding into Iraq’s energy strain, as households face “two-bill” electricity costs from unreliable grid supply and costly private generators. Aviation Sanctions Hit Iraq Routes: Iran flights to Baghdad and Muscat are set to be cancelled ahead of new US aviation sanctions, with talks to redirect Baghdad-bound flights to Najaf. Oil Market Spillover: Oil prices extended losses as diplomacy advanced and Saudi Arabia restarted its East-West pipeline, while shipping risks and rerouting keep costs elevated across the region. Iraq’s Industrial Step: A Chinese-built gas processing facility at Iraq’s EBS oilfield was put into operation, aimed at cutting gas flaring and improving energy utilization. Regional Governance: Iraq PM Ali al-Zaidi met US and regional leaders in New York, pressing for weapons to be brought under state control and discussing energy, trade, and investment. Aviation Fuel Expansion: Kuwait’s KAFCO expanded overseas fueling services, including at Najaf Airport, signaling continued regional aviation demand despite sanctions.

G7 Pressure on Iran-Backed Yemen War: G7 foreign ministers urged Iran to stop military support for the Houthis, warning that attacks on Saudi Arabia and threats to maritime trade could destabilize global shipping and energy markets, with special focus on protecting navigation through the Strait of Hormuz. Iraq Oil Revenue Hit by Strait Disruptions: Iraq’s PM said Baghdad has lost about $60bn since the US-Iran conflict began, with roughly 60% of monthly export revenues wiped out as Iran restricts Iraqi tankers from using Hormuz. Fuel Oil Exports via Jordan: Iraq’s Oil Ministry (SOMO) signed contracts to buy fuel oil on an ex-depot basis for export through Aqaba, using Jordanian routes and tanker logistics. Energy Route Diversification Push: The US floated a $10bn “PACT” fund to rebuild Middle East energy infrastructure and reduce reliance on Hormuz, with Iraq listed among partner countries. Aviation Sanctions Watch: Iran said its airlines are still operating internationally despite US threats that foreign airports and services could be cut off from Sept. 23. Security Deadline for Militias: Iraq set a June 2027 target to disarm and disband Iran-aligned militias, starting with a 90-day pause on attacks.

Fuel Crisis & Policy: Iraq’s parliament voted on recommendations to tackle worsening fuel shortages, including reviewing the impact of recent oil-derivative price hikes, tightening distribution oversight, and demanding detailed reporting on production, imports, consumption, and provincial supplies. Trade & Industry Push: Iraq’s Ministry of Trade outlined tighter import controls and faster export procedures, targeting Gulf states, Turkey, Iran, Jordan, Egypt, and wider Asian/European markets. US-Iraq-Iran Trade Talks: Separate meetings in Baghdad focused on expanding US and Iranian company participation in Iraq across oil, gas, health, and trade facilitation, including plans tied to the Baghdad International Fair. Energy Reconstruction Fund: The US proposed a $10bn “Pact” fund to rebuild Gulf energy infrastructure damaged in the Iran war, seeking matching contributions from Saudi Arabia, UAE, Qatar, Bahrain, Kuwait, Oman, Iraq, and Jordan. Shipping Pressure in the Region: Strait of Hormuz traffic stayed thin as Middle East tensions persist, while Iraq-linked Basrah crude was reported moving via tanker transfers amid route disruptions. Kurdistan Security Unification: Iraq’s Kurdistan Region announced the long-delayed unification of Peshmerga forces under a single command, with a next phase focused on capabilities and air defense. Iraq Market Watch: The Iraq Stock Exchange saw weekly trading fall sharply to about $4.6m, with the ISX60 edging down. Health Sector Event: Iraq launched the 6th International Health Exhibition and Conference in Baghdad, set for Oct. 28–31, aiming to boost medical capacity and local pharma/medical device manufacturing.

Oil & Security: Kurdistan’s presidency says after Sept. 30 the federal government will carry major responsibility for defending Iraq, including air protection for KRI oil facilities, as Baghdad and Erbil align on infrastructure defense ahead of the end of the Global Coalition mission. Fuel Crunch & Retail: Kirkuk proposes a women-only fuel station, while Iraq’s wider fuel shortage continues with long lines; in Al-Anbar, health inspectors shut four unsafe food businesses. Water & Environment: Iraq’s environment minister says “legal and punitive measures” will target Tigris and Euphrates polluters after pollution warnings tied to hospital waste, sewage, and agricultural runoff. Military Reform: Erbil officially announces full unification of Peshmerga forces under the regional Ministry of Peshmerga Affairs, aiming to end divided command structures. Trade & Finance: Bank of Baghdad secured a $25m EBRD trade finance facility to expand funding for importers, exporters, and SMEs. Energy Exports: Iraq’s oil ministry says September crude exports averaged about 2.6m bpd despite Hormuz-linked shipping disruption. Regional Energy Links: Iraq and Jordan report suspended crude and electricity flows, while talks continue on restarting supplies and expanding interconnection capacity. Industry & Health: Health Expo Iraq is set for Oct. 28–31 in Baghdad to support Iraq’s healthcare industry and capacity building.

Fuel Crisis & Prices: Iraq’s Sadiqoon bloc says it will question Oil Minister Bassem Mohammed al-Abadi over nearly a month of fuel shortages that have hit factories and left motorists in long lines, while warning proposed price changes could worsen costs for consumers and industry. Subsidy Pressure: Lawmakers also say higher fuel costs are feeding into construction and other goods prices, as the Cabinet lifted subsidies for some sectors from Sept. 1. Oil Exports Watch: Iraq’s September exports reportedly eased from about 3 mbpd at the start of the month to around 2.4 mbpd, with shipping disruptions tied to the wider Strait of Hormuz crisis still affecting supply chains. Cross-Border Trade: Iraq and Syria are working to upgrade the Al-Waleed-Tanf crossing, improve yards and roads, and speed procedures to handle more truck traffic and petroleum product exports. Energy Infrastructure: Syria is pushing to rehabilitate the Kirkuk–Baniyas oil corridor with Iraq and an international consortium, aiming for transit fees and better export diversification. Food Safety Shock: A Najaf case where wild-boar meat was allegedly sold as livestock meat has shaken consumer trust, with legal action and a prison sentence reported. Regional Shipping Risk: Qatar says it has been mediating for nearly two weeks to restart US-Iran talks, stressing the need to protect key waterways like the Strait of Hormuz.

Solar Finance in Iraq: Rasheed Bank launched up to 30 million IQD (about $23K) seven-year solar and renewable-energy loans at 3% interest, backed by the Central Bank of Iraq and aimed at cutting reliance on conventional power. Energy Security Shock: US EIA data shows Iraq’s crude exports to the US dropped to zero last week after earlier fluctuations, underscoring how quickly regional disruptions can reshape supply chains. Regional Shipping Pressure: With Hormuz and Red Sea routes under strain, oil shipments through Hormuz reportedly hit a six-month high, while US officials warn escalation risk as Houthi attacks target Saudi energy and infrastructure. Iraq-Linked Diplomacy: Iraq’s University of Technology moved to deepen ties with Spain’s Seville and Granada universities, targeting joint research and Erasmus+ mobility. Industry & Engineering Footprints: Ramsis Engineering opened a new Basra office, signaling continued investment in Iraq’s engineering services as regional instability tests logistics and energy demand.

Iraq Jobs Crunch: About 200,000 Iraqis finish university and technical education each year, but graduates face a job drought as the economy—dominated by oil revenue—creates too few posts and public hiring is squeezed by wage-heavy spending. US-Iran Tensions Spill Into Iraq: The US Embassy in Baghdad issued a fresh alert urging Americans to stay vigilant, avoid gatherings, and monitor travel disruptions, citing possible escalation tied to Iran-backed Houthis and attacks across the region. Energy Shock From Pipeline Attacks: Strikes linked to Iraq-based militants and Yemen’s Houthis hit Saudi infrastructure, including the East-West oil pipeline, raising Brent and threatening restart timelines—pushing energy risk beyond the Strait of Hormuz. Iraq-US Energy Cooperation: Iraq’s Finance Minister urged US firms in oil and energy to speed up project delivery to unlock foreign investment, as Iraq and Washington build on recent agreements worth tens of billions. Regional Shipping Pressure: Hormuz traffic is reported higher in recent weeks, but Bab el-Mandeb and Red Sea instability keeps global freight and oil logistics under strain.

Iraq-US Sanctions Timing: Iraqi PM Ali al-Zaidi plans to ask Trump to delay any new US financial or economic sanctions tied to the Sept. 30 deadline for disarming factions, warning Baghdad fears Washington could restrict dollar shipments if progress stalls. Energy Exports Under Pressure: Saudi Aramco told European refiners no oil deliveries next month after a drone attack shut its main East-West pipeline; partial restart is expected in days, full restoration in about six weeks. Red Sea Shockwaves: With the Strait of Hormuz effectively blocked and Bab al-Mandeb risk rising, shipping flows are thinning and costs are climbing, threatening global supply chains that also touch Iraq’s energy and trade environment. Iraq-Europe Pipeline Push: France says it’s working with Iraq and Jordan on a pipeline to move Iraqi oil and gas toward European markets, aiming to bypass disrupted conventional routes. Currency Volatility in Iraq: The US dollar crossed 160,000 IQD in Iraq’s parallel markets as liquidity tightens amid geopolitical and fiscal strains, with traders warning rates could climb further. Security Tech in Iraq Region: INTERPOL says an AI-backed counter-terror operation identified 126 suspected foreign terrorist fighters, including Iraq participation.

Energy Security & Exports: Saudi Arabia told European refiners it will not deliver crude allocations in October after drone damage to the East-West pipeline, a key bypass route to Yanbu that had been shielding exports from Hormuz disruption. Iraq-Linked Infrastructure Risk: Reporting ties the pipeline attack to Iran-aligned militias operating from Iraq, underscoring how Iraq-based conflict can quickly spill into regional oil logistics. Shipping Shock: With Houthis tightening control around Bab el-Mandeb and Red Sea routes, global trade and fuel pricing face fresh strain, pushing markets to price in longer supply outages. Counter-Terror Tech: INTERPOL’s AI-backed “Operation Shams II” identified 126 suspected foreign terrorist fighters from 108,000+ facial images, with Iraq among participating countries. Local Industry & Agriculture: Kurdistan’s Akre hosted a produce festival aimed at boosting private-sector processing and industrializing agricultural outputs, with rising exports of figs, tomatoes, rice, sumac and dried goods. Environment: Najaf’s desert habitat is facing mounting pressure from drought, hunting and vehicle intrusion, threatening biodiversity.

Energy & Infrastructure: Saudi Arabia shut its East-West crude pipeline after drone damage tied to Iraq-based Iran-backed militias, forcing Aramco to restore flows partially within days and aiming for full recovery in about six weeks—another blow as Hormuz disruption keeps global supply tight. Iraq–Energy Projects: KBR and AKT signed to complete engineering design for Iraq’s West Qurna Gas Capture Project, targeting associated gas collection to cut flaring and boost domestic use. Local Industry Expansion: Bahrain’s Ramsis Engineering opened a Basra branch to support Iraq’s oil, gas, petrochemicals, power and desalination sectors with mechanical engineering, manufacturing and maintenance. Environment & Public Health: Baghdad’s recurring sulfur-like odor is linked to pollution plus thermal inversion trapping emissions from power plants, refineries, factories, and waste burning, with health risks flagged for children and older adults. Security & Tech: INTERPOL’s AI-assisted Operation Shams II processed thousands of jihadist facial images, identifying 126 foreign terrorist fighters, with Baghdad-based inputs supporting the work. Business & Trade Outlook: Iraq’s PM Ali al-Zaidi is set to meet Trump in New York and push a shift toward investment and commerce, building on recent energy and infrastructure deals.

Red Sea Energy Shock: Houthis’ push toward Bab el-Mandeb is tightening control over a key trade chokepoint, raising fears for global shipping and oil flows as crude stays above $100 and analysts warn the region can’t absorb a second major closure. Saudi Pipeline Disruption: Reuters reports three pumping stations on Saudi Arabia’s East-West crude pipeline were hit in the drone attack traced to Iraq, with repairs possibly taking 5–6 weeks and partial capacity potentially returning sooner—an overland bypass meant to reduce Hormuz risk. Iraq Link in Focus: The pipeline shutdown followed attacks traced to Iraq-based launch activity, while Iran’s trade is also reported to be falling as overland routes get tangled at borders. Market Pressure: Diesel and gasoline price spikes are expected to intensify, with analysts warning the fuel hit could spread beyond the Gulf into broader costs. Kurdistan Stability: KRG PM Masrour Barzani urged unity to defeat terrorism and protect infrastructure and the economy amid ongoing regional threats. Defense Industry Angle: The U.S. Army awarded Northrop Grumman a $4.8bn contract to mass-produce CIRCM laser defenses for helicopters through 2035.

Iraq-US Diplomacy: Iraq’s new ambassador to Washington, Krikor Der-Hagopian, presented credentials to President Donald Trump and flagged priorities including follow-up on PM Ali Al-Zaidi’s U.S. visit and expanding economic, investment, energy and security cooperation. Fuel Subsidy Shake-Up: Iraq’s Council of Ministers is reviewing steps to remove fuel subsidies for some sectors after shortages of gasoline and kerosene, with lawmakers saying Cabinet changes created fresh supply problems even as citizen fuel remains subsidized. Budget Pressure: Iraq is drafting its 2027 budget amid an uncertain oil market, with a projected deficit of more than 60 trillion dinars ($45.8B) and unresolved assumptions on oil prices and export volumes. Kurdistan Budget Fight: At the Slemani Summit, KRG Finance Minister Awat Sheikh Janab Nouri criticized Baghdad’s budget-share formula, arguing sovereign deductions and the “actual-spending” method cut Kurdistan’s share and calling for full implementation of court rulings on salaries. Power Supply Update: Kurdistan electricity generation is set to return to normal after Dana Gas reduced gas supplies from Khor Mor, hitting output by about 1,000 MW. Transport & Trade Links: Iraq and Turkey finalized a draft transport infrastructure agreement to formalize cooperation on modernizing transport systems and advancing Iraq’s “Development Road” plan linking Basra to Turkey.

Iraq–Energy Diplomacy: Iraq is pushing to diversify oil export routes beyond Hormuz, with fresh outreach to Europe and Germany on energy cooperation and investment. Regional Energy Shock: Saudi Arabia’s East-West pipeline shutdown after drone attacks tied to Iraq has reignited fears for Red Sea supply chains, with Aramco aiming to restore part of capacity within days and full capacity in about six weeks. Oil Market Pressure: Analysts warn the disruption could keep crude and fuel prices elevated, while shipping risks around Bab el-Mandeb and Hormuz continue to rattle global logistics. Security & Infrastructure Fallout: Reports also highlight damage to U.S. military facilities from Iranian strikes, underscoring how the wider Iran conflict is spilling into regional infrastructure and industrial stability. Industry Watch: Iraq’s Siemens Energy power framework and other bilateral energy talks point to continued focus on grid and power sector upgrades amid regional volatility.

Red Sea Energy Shock: Saudi Arabia cut oil shipments to Europe after drone attacks damaged its East-West export pipeline, with Reuters citing cancellations/delays for late-September cargoes and crude prices pushing above $120/bbl; Saudi says drones were launched from Iraqi territory and the pipeline shutdown is expected to be “measured in days,” while traders warn of longer-term rerouting via Hormuz and other routes. Holy Sites Under Fire: Saudi air defenses intercepted a Houthi drone south of Mecca, calling it a “red line,” as Houthis denied targeting the holy city and the wider Yemen conflict escalated. Iraq Oil & Industry Link: Iraq’s Oil Ministry and Angola’s Sonangol discussed options to boost Qayyarah heavy-oil output and expand a local refinery to process more crude domestically, reducing reliance on long export routes. Oversight on the Iran War: A Pentagon inspector general report highlighted U.S. weapons shortfalls and damage to bases and diplomatic facilities across West Asia, including Iraq, underscoring how regional conflict is straining military and industrial supply chains. Iraq-Europe Business Push: Iraq and France signed multiple energy and defense MoUs, while Siemens Energy agreed a new cooperation deal for Iraq.

Iraq–Germany Energy Push: Iraq and Siemens Energy signed a Phase IV power cooperation framework in Berlin, covering new generation and transmission projects, grid upgrades, maintenance, financing mechanisms, and workforce training. Iraq–Germany Business Dialogue: Prime Minister Ali al-Zaidi met German leaders and business figures in Berlin, pitching Iraq’s investment map across energy, oil and petrochemicals, phosphates, clean energy, and automation, alongside plans for financial, tax, and banking reforms. Iraq–France Deals: Six MoUs were signed between Iraq and France in Paris, spanning defence cooperation, gas supply via TotalEnergies, civil aviation, youth and innovation, and partnership with AFD. UK Trade Mission in Baghdad: The Iraq Britain Business Council wrapped up a major Baghdad programme with meetings across ministries and regulators, including agriculture and investment bodies, with participation from energy, banking, and maritime-linked firms. Oil Market Shock Spillover: Saudi Arabia issued broad security alerts after Houthi attacks and blamed an Iraq-linked group for a drone strike that knocked out the East–West Pipeline; Saudi officials said crude flows could resume within days, but repair timelines and potential supply losses are driving volatility that matters for Iraq’s export outlook. Regional Security Context: UN officials warned that Yemen’s Red Sea/Bab al-Mandeb situation is growing more volatile as Houthis advance, raising risks for global shipping and energy corridors.

Iraq–Energy Deals: Iraq’s Oil Minister Basim Mohammed Khudair says Baghdad discussed four major energy projects with French companies in Paris, including Artawi field development (210,000 bpd), gas capture (600 million scfd), seawater injection for depleted reservoirs, and a 1,000MW solar power plan. Basra Industry & Labor: Basra refinery workers and former FCC project staff staged protests, with FCC workers demanding permanent jobs after years on the unit and layoffs once it became operational. Aviation & Logistics: Diwaniyah Governor Abbas al-Zamili signed an MoU with China CAMC Engineering to build a civilian airport plus a free trade zone, aiming to boost trade and investment in south-central Iraq. Regional Energy Shock (Iraq-linked): Reuters reports ADNOC bought millions of barrels of discounted Iraqi crude, lifting August–September volumes amid export disruptions tied to the Iran war. Industrial Safety: Basra formed a committee to investigate a deadly ammonia leak at a fertilizer plant that killed 2 and injured 114, with penalties possible if negligence is found. Security & Supply Chain Pressure: Iraq says investigations are ongoing after drones launched from Iraqi territory hit Saudi Arabia’s East-West pipeline, worsening oil supply fears as repairs are expected to take weeks.