AGP Executive Report

Kurdistan Politics: PUK leader Bafel Talabani urged the Kurdistan Regional Government to improve ties with Baghdad, calling Prime Minister Ali al-Zaidi’s leadership an opportunity. He also pressed for closer PUK-KDP cooperation. Security: Two drones struck a camp housing Iranian Kurdish opposition groups near Erbil; no casualties or damage were immediately reported. Economy: Customs revenues rose by 108 billion dinars year-on-year in September, while the dollar climbed to about 165,000 dinars per $100 in Baghdad’s exchange markets. Regional Tensions: Baghdad has condemned the deadly Houthi attack on Riyadh airport, while Iraqi militia Kataib Hezbollah voiced support for the Houthis. Saudi Arabia extended the airport closure amid threats of further strikes. Accountability: An Iraqi court sentenced two Sunni Endowment employees to four years each for forging property-leasing approvals. Separately, authorities recovered about $2.64 million for Rafidain Bank in a corruption case. Detention Case: Australian engineer Robert Pether has left Iraq for Ireland after a court dismissed proceedings against him and lifted his travel ban, ending a five-year ordeal.

Regional Diplomacy: Baghdad condemned the deadly Houthi strike on Riyadh airport, which killed 12 and injured 309, and called for an end to military escalation. Prime Minister Ali Al-Zaidi is expected to visit Saudi Arabia and Kuwait this week, with talks set to cover regional tensions and a possible revival of Iraq’s oil pipeline to the Red Sea. Energy and Economy: Al-Zaidi discussed boosting oil and gas production with TotalEnergies and ConocoPhillips, saying Iraq aims to end gas imports. Non-oil revenues reached 8.7 trillion dinars by July, up 23.5% year over year, but spending left a deficit exceeding 26 trillion dinars. A lawmaker has challenged the dinar rate increase in federal court. Housing and Diplomacy: Diyala has prepared land for about 44,000 housing plots under the Watan Initiative, while Baghdad will host the OIC foreign ministers’ meeting on October 17–18. Security: Iraqi intelligence helped Libya foil an attempt to smuggle 1.2 million Captagon pills.

Regional Diplomacy: Iraq condemned the deadly attack on Riyadh’s airport and called for an end to military operations and protection of civilian facilities. Security: A renewed ISIS attack in Hawija and the arrest of a suspected senior militant underline security concerns following the coalition’s withdrawal. Economy: The dinar’s official rate reset has widened pressure on households and businesses; the parallel-market dollar recently eased to around 164,000 dinars, while Baghdad suspended poultry and egg tariffs amid rising food costs. Oil and Trade: Iraq is pursuing a Turkish funding deal for the Development Road and exploring a Syrian route to move crude amid risks to Gulf shipping. Politics: Muqtada al-Sadr is seeking a stronger political role with calls to curb militias, as an anti-corruption drive jails lawmakers and faces questions over whether it can reach their patrons.

Post-Coalition Ties: Iraq and the US discussed future cooperation, regional security and the dinar in Istanbul, days after the coalition mission ended. Currency and Prices: The dollar eased to around 162,000–164,000 dinars per $100 on parallel markets. To curb food inflation after the official rate change, Baghdad suspended import duties on poultry, eggs and livestock; Sulaymaniyah authorities also launched price inspections. Security: ISIS militants clashed with Iraqi forces in Hawija, underscoring the security challenges facing Iraq after the coalition’s departure. Development Road: Baghdad is pursuing an oil-backed funding pact with Turkey for the transport corridor linking Basra’s Grand Faw Port to Turkey and European markets. Services and Housing: Nineveh plans 135 new schools for 1.2 million pupils, while Karbala has launched the first stage of a national initiative to distribute one million residential plots.

Security: Iraqi forces clashed with ISIS militants in Kirkuk’s Hawija district after fighters attacked a checkpoint; several militants were killed or wounded, with no Iraqi casualties reported. The clashes come amid a rise in ISIS activity, while Iraq has rejected Syria’s request to transfer 4,000 suspected group members held in detention. Kurdistan: Drone attacks have targeted Iranian Kurdish opposition sites in Erbil province, adding to security concerns as US forces complete their withdrawal from Iraq and Baghdad faces pressure to contain armed groups. Economy: The dinar’s devaluation has triggered public and parliamentary backlash ahead of the 2027 budget, with lawmakers seeking a reversal and relief measures as the dollar surges on the parallel market. Oil and trade: Iraq is moving crude through the Strait of Hormuz despite regional disruption and is seeking more tankers to manage shipments; Baghdad and Damascus are also preparing to transport Iraqi crude to Syria by truck.

Oil and Trade: Iraq is moving to truck crude to Syria as it seeks alternatives to risky Strait of Hormuz routes. Chinese independent refineries are also turning to Iraqi oil as Iranian supplies falter. Currency Pressures: The central bank says the dinar’s devaluation is final, as lawmakers criticize the move and food prices rise. Prime Minister Ali al-Zaidi defended the new rate in parliament. Security: Drone attacks targeted Iranian Kurdish opposition sites in Erbil province, while Baghdad rejected a Syrian request concerning 4,000 suspected Islamic State detainees. An ISIS attack near Kirkuk that killed a police officer has renewed concerns about the group’s threat after the US troop withdrawal. National Team: Iraq’s football federation plans to add an Iraqi assistant coach to Graham Arnold’s staff after the team’s Gulf Cup exit, with the 2027 Asian Cup ahead.

Erbil Security: Drones struck a refugee camp and targeted Khabat district, with no casualties reported. IS Detainees: Iraq rejected Syria’s request to repatriate about 4,000 suspected Islamic State prisoners, saying those accused of crimes in Iraq will face Iraqi law. Currency Pressure: Prime Minister Ali al-Zaidi defended the new official rate of 1,500 dinars per dollar, citing oil-export disruption, debt and the need to keep salaries paid; the Coordination Framework proposed price protections and fee cuts to cushion households. Oil Routes: Baghdad is seeking a Syrian route to move crude around Strait of Hormuz risks as it explores ways to sustain exports. Connectivity: Iraqi Airways has resumed direct flights to Iran after a US sanctions waiver, while Iraq plans to block Waze, citing its Israeli origins.

Currency Pressure: Prime Minister Ali al-Zaidi is expected to face lawmakers over the dinar’s devaluation from 1,320 to 1,520 per dollar, a move that has drawn public anger amid rising prices and salary concerns. Flights Resume: Iraqi Airways has restarted direct flights to Iran after a US sanctions waiver, restoring travel links suspended in March. Oil Routes: Baghdad is pursuing alternatives to the Strait of Hormuz, with Syria saying an overland route to the Mediterranean could begin soon; Iraq is also looking to boost exports through Turkey. Security: An Islamic State attack near Kirkuk that killed a police officer has sharpened concerns about the group’s threat as Iraq takes on more counter-ISIS duties after the coalition’s withdrawal.

Air Links: Iraqi Airways has resumed daily direct flights from Najaf to Tehran, Mashhad and Isfahan after a seven-month suspension, restoring routes used for religious, medical and educational travel. Security: Attacks near Hawija, north of Baghdad, killed a Federal Police officer and wounded four others; authorities imposed a nighttime curfew as officials warned of a possible ISIS resurgence. Customs: Iraq says digital ASYCUDA processing has helped lift customs revenues to about $2 billion so far this year, with the system set to expand to Kurdistan Region crossings. Currency and Oil: The dinar’s official rate was cut to around 1,500–1,520 per dollar as war-related shipping disruption squeezes oil exports, while the parallel-market rate climbed above 1,700. Baghdad is also seeking a Syria route to move crude toward the Mediterranean and bypass Hormuz.

Dinar Shock: Iraq has reset the official exchange rate to 1,500–1,520 dinars per dollar as war-related oil shipping disruptions squeeze state revenues. The parallel rate briefly topped 1,700, while markets and shops closed in protest. Lawmakers are demanding an emergency session and a reversal, warning that imports and household costs will rise. Analysts say reserves could fall sharply, with an IMF program a possible last resort if oil income keeps sliding. ISIS Threat: ISIS attacked a Hashd al-Shaabi base near Hawija, with no casualties reported. The assault came a day after an attack killed two federal police officers and wounded others, underscoring the security challenge following the coalition’s withdrawal from Iraq. Regional Tensions: Muqtada al-Sadr urged Washington to take a “moderate” stance and said Iraq must not become an arena for outside conflicts.

Currency & Cost of Living: Iraq’s cabinet approved a major dinar devaluation, setting the official rate at 1,520 IQD per US dollar (with a 1,500 purchase rate and 1,510 bank/sales rate), a move linked to disruptions to oil exports amid the Iran-U.S. conflict—officially narrowing the gap with the parallel market but raising import costs. Anti-Corruption: Iraq’s Integrity Commission says it uncovered a 2.19 billion IQD embezzlement scheme in Salah Al-Din’s traffic directorate, involving forged traffic citation receipts and the detention of senior officers. Oil & Trade: Chinese independent refiners reportedly increased purchases of Iraqi crude for October-November delivery, using Basra grades as supplies from Iran dwindle, while OPEC+ kept November output targets steady despite ongoing Gulf disruptions. Security & ISIS: Syrian forces arrested a suspected ISIS commander tied to a deadly mosque bombing in Homs, underscoring continued cross-border counterterror efforts. Governance: Iraqi Prime Minister al-Zaidi met tribal leaders, saying recovered corruption funds will go to a Development Fund and that talks with Turkey produced an agreement on withdrawing Turkish forces.

US Withdrawal Fallout: The U.S. says its final troops left Iraq on Sept. 30, formally ending Operation Inherent Resolve, but Iraqi officials now worry about ISIS pockets and the growing clout of Iran-backed militias. Sovereignty Flashpoint: Days after the pullout, PMF members were photographed trampling a U.S. flag in Baghdad; Iraq’s PMO says arrests were made and a probe is underway, as Washington and Iraqi lawmakers demand accountability. Militia Disarmament Push: Prime Minister Ali al-Zaidi says three armed groups agreed to disarm, while negotiations continue and the government targets a June 2027 deadline for weapons outside state control. Security Update: Iraqi forces in Kirkuk arrested a suspected ISIS leader after an attack killed a police officer, with Hawija described as stable. Economy & Energy: Iraq’s oil exports keep moving—seaborne exports hit 2.57m bpd in September—and Iraq is preparing a new Iraq-Syria oil pipeline that could start work in Q1 2027. Tech & Daily Life: Iraq plans to ban the Israeli-developed Waze app by end-December, and Baghdad markets saw gold prices fall while the U.S. dollar rate stays volatile.

Iraq’s Maritime Revival: Iraq’s state-owned Iraqi Line will restart regular Gulf shipping on Oct. 15 after a 50-year gap, with the first trip from Jebel Ali to Umm Qasr, aiming to boost trade and give merchants a state-backed route as Strait of Hormuz disruptions continue. Oil & Shipping Pressure: Gulf oil exports (excluding Iran) rebounded to over 81% of pre-war levels in September, while Iran’s exports fell to near zero; refined fuel recovery lagged, keeping diesel and jet fuel tight. Security & ISIS Crackdowns: Kurdistan Asayish arrested 22 suspects in ISIS-linked cells across several areas, while ISIS attacked Iraqi Federal Police in Hawija, killing two officers. State-Building & Politics: Parliament is set to vote Oct. 8 on completing Iraq’s cabinet; meanwhile, PM Al-Zaidi says three armed factions handed over weapons and others agreed to surrender, with a June 30, 2027 deadline to bring arms under state control. Anti-Corruption: Iraq’s Integrity Commission arrested the head of the Saladin Investment Commission over alleged corruption. Kurdistan-Baghdad Ties: KRG PM Masrour Barzani said relations with Baghdad are moving toward resolving outstanding issues, stressing constitutional rights for Kurds.

Security Update: Islamic State militants attacked a federal police site near Hawija, about 70 km southwest of Kirkuk, killing at least one officer and injuring four, in the first reported IS assault on Iraqi forces since the US withdrawal on Sept. 30. Sovereignty & Diplomacy: Iraqi Prime Minister Ali al-Zaidi ordered arrests and an investigation after pro-Iranian elements drove over US flags during Baghdad’s Sovereignty Day parades, aiming to prevent a wider crisis with Washington. Iran Flights Resume: After a US sanctions exemption, Iranian airlines restarted flights to Najaf, with Iraq also announcing direct Iraqi Airways routes to Tehran, Mashhad and Isfahan from Oct. 8. Armed Groups Disarmament: Zaidi said five non-state factions agreed to surrender weapons, with three already handing them over, as the government’s phased disarmament push continues into 2027. Oil Logistics: Iraq’s state tanker firm moved 2 million barrels of crude through the Strait of Hormuz on a VLCC, and Baghdad is now seeking more tankers to regain control amid shipping risks. Sports: India’s U17 women opened AFC qualifiers by crushing Iraq 14-0 in Malaysia.

Najaf–Tehran Air Link Restarts: Iraq’s Najaf International Airport received its first direct flight from Tehran after a US waiver, with Caspian Airlines landing and the aircraft greeted by a water-cannon salute. Iraq says Iranian carriers (except Mahan Air) can run up to 40 flights daily to Najaf, easing travel for pilgrims, patients, and tourists after flights were suspended on Sept. 25. US Troop Exit and Sovereignty Pressure: With the last US-led coalition troops leaving Erbil on Sept. 30, Baghdad is pushing harder on state control, including a warning from PM Ali al-Zaidi to the Shiite Coordination Framework over missed deadlines to bring weapons under state authority. Arms Control and Diplomacy: Al-Zaidi’s message also ties to talks with the US and the political and economic fallout if weapons issues stay unresolved. Oil Market Watch: OPEC+ kept November output unchanged at 31.01 million bpd, with Iraq’s required level at 4.431 million bpd. Baghdad Local Life: Baghdad’s Sabaa Qusour faces a severe school shortage, with over 10,000 students affected by overcrowding and possible school evacuations. Security and Justice: PMF operations arrested 55 suspects across 12 provinces, while Iraqi courts handed down death and life sentences in separate drug cases.

Flights & Pilgrimage: Iranian airlines resumed flights to Iraq’s Najaf after the U.S. granted Baghdad an exemption, with up to 40 daily flights allowed (except Mahan Air) and Caspian Airlines landing first; Iraqi Airways also received a waiver. Sovereignty Day Fallout: Prime Minister Ali al-Zaidi ordered an investigation after pro-Iranian PMF vehicles were filmed trampling a U.S. flag during Baghdad’s Sovereignty Day parades; arrests were reported and legal accountability demanded. Oil Under Pressure: Iraq’s state tanker company shipped 2 million barrels of crude beyond the Strait of Hormuz for the first time in decades, seeking better pricing as Hormuz exports remain disrupted by the U.S.-Iran standoff; OPEC+ also agreed to keep output steady for November. Security & Courts: ISIS left an IED that killed two Iraqi soldiers and wounded two near Mosul; in Kirkuk, a senior counterterrorism official was removed after a deadly operation involving Kurdish civilians. Economy & Daily Life: The dollar rose in Baghdad and Erbil; Iraq’s budget deficit hit about $20.16B in the first seven months of 2026 as spending outpaced revenues. Kurdistan Humanitarian: 11 Kurdish asylum seekers missing in Libya were returned to the Kurdistan Region after months of efforts.