AGP Executive Report

Federal Liquidity Boost: The U.S. Federal Reserve sent a new $500 million cash shipment to Iraq’s Central Bank, as Baghdad faces mounting financial pressure tied to oil disruptions and rising pay obligations. State Control Push: Iraq is expanding nationwide firearms registration offices to bring weapons under state control, regulate civilian ownership, and curb illegal arms trafficking. Security Crackdown: Iraqi Military Intelligence says it arrested 19 wanted suspects across six provinces, handing them to judicial authorities for legal proceedings. Kurdistan Stays Clear: KRG PM Masrour Barzani reiterated Erbil wants no role in the regional conflict and backs Baghdad’s push to restrict weapons to regular forces. Regional Shockwaves: Turkey’s Kurdish peace bill cleared a key parliamentary hurdle, while Saudi, Türkiye, and Pakistan signed a NATO-style mutual defense pact—moves that could reshape how Iraq’s neighbors manage the Iran war spillover. Middle East Flashpoints: Yemen’s Houthis escalated attacks around Marib, and UN officials warned fighting could broaden.

Militia Response Delayed: Iraq’s Islamic Resistance umbrella group said it postponed retaliation against US-Saudi strikes after calls from Badr leader Hadi al-Amiri and other political figures, stressing the response is not canceled and that martyrs’ blood won’t be “bargained.” Security Pressure on Baghdad: The move comes as Iraq faces heightened scrutiny over armed groups operating outside state control, with Baghdad warning it will meet a Sept. 30 disarmament deadline while boosting security measures to prevent spillover. Iraq-Saudi Re-engagement: Iraqi Prime Minister Ali al-Zaidi received a renewed invitation to visit Riyadh during talks with Saudi intelligence chief Khalid bin Ali Al Humaidan, with both sides emphasizing sovereignty and preventing Iraqi territory from being used to target neighbors. Treasury Sanctions Iran Links: The US sanctioned digital-asset exchanges and networks tied to IRGC-linked laundering and sanctions evasion, targeting entities across multiple countries. Human Trafficking Crackdown: Iraq’s anti-human trafficking directorate said it dismantled three networks, including an organ-trafficking ring, with arrests made and seized materials. Digital Market Step: Iraq’s regulator (CMC) granted Apple trusted digital service provider status for apps and ads, signaling deeper integration into Iraq’s regulated tech framework. Economy Watch: Currency issuance rose 13.8% in the first five months of 2026 to about $86B, framed as a liquidity response to oil-export shocks tied to the Strait of Hormuz disruption.

Armed Factions vs. Baghdad: Prime Minister Ali al-Zaidi and Badr leader Hadi al-Amiri agreed in a dawn meeting to de-escalate a standoff, postponing planned operations against armed groups in exchange for a halt to military action targeting Saudi Arabia and space for diplomacy, as Baghdad raised security readiness amid fears of retaliation. Militia Disarmament Push: Iraq’s Security Media Cell said there is “no turning back” on restricting weapons to the state, framing it as a National Security Council decision aimed at stability and tighter control of illegal arms. Badr Calls Restraint: Al-Amiri urged Iran-aligned factions to postpone any response to last month’s US-Saudi strikes on PMF sites, calling for restraint while demands for apology, compensation, and de-escalation are handled through diplomacy. Regional Security Shock: Saudi Arabia warned of imminent coordinated attacks from Iraqi militias and Yemen’s Houthis under IRGC supervision, targeting energy sites, ports, and airports—prompting heightened alert. Gulf Defence Pact: Saudi Arabia, Turkey, and Pakistan signed a joint defence agreement in Mecca, saying an attack on any one is treated as an attack on all, as Gulf states brace for wider turmoil. Kurdistan Commemoration: KRI President Nechirvan Barzani marked the 93rd Simele Massacre anniversary, reaffirming pluralism and coexistence as a shared homeland for all communities. Economy/Finance: The US Federal Reserve sent a $500 million cash shipment to Iraq’s Central Bank to support traveler transactions and foreign remittances, amid ongoing banking and sanctions-related adjustments.

Saudi Arabia–Iraq Security Tensions: Riyadh says it expects coordinated attacks “from the north and south” by Iraqi militias and Yemen’s Houthis under IRGC supervision, warning civilian and economic targets could be hit and pledging a strong response. Armed Groups vs. State Authority: Iraq’s State Administration Coalition backed Prime Minister Ali Al-Zaidi’s push for security, warning Iran-backed factions that missing the Sept. 30 disarmament deadline could mean terrorism charges and that Iraqi territory must not be used to attack neighbors. Regional Diplomacy Pressure on Hormuz: Iran and Oman are nearing a Strait of Hormuz transit draft, while U.S. officials say any temporary routes would avoid approvals or tolls—yet the talks remain fragile amid wider Middle East escalation. Energy Deal, Iraq-Türkiye: Ankara and Baghdad signed a one-year crude oil transport agreement allocating 750,000 barrels per day through the Silopi–Ceyhan pipeline system to keep exports moving during Hormuz disruptions. KRG Governance Dispute: Kurdish authorities rejected claims tied to Dana Gas and Crescent gas supplies to Iraq’s electricity ministry, adding to ongoing friction over energy contracts. Domestic Economy & Security: Iraq’s leadership ordered higher military readiness as financial strain deepens, with reports of cash-flow pressure and salary delays amid the Strait crisis.

Kirkuk Dispute: The Kurdistan Regional Government’s board for areas outside the Region condemned “unconstitutional” remarks by Kirkuk’s Turkmen governor Mehmet Seman on Article 140, calling the constitutional roadmap the “clearest” way to resolve Kirkuk’s identity question and urging him to avoid inflammatory statements. Armed Groups & State Control: Iraq’s ruling coalition met and reaffirmed an end-September deadline for armed groups to hand over weapons, warning that anyone using Iraqi territory to launch attacks on neighbors will be treated as “outlaws” and prosecuted as criminals. Financial Crisis: Iraqi lawmakers are moving toward an emergency session next week as the Strait of Hormuz disruption squeezes oil revenue and threatens delays in public salaries. Sanctions Relief: The US Treasury removed counterterrorism sanctions on Iraq’s Fly Baghdad after the airline made operational changes, while sanctions on its owner remain. Regional Security: The UN warned ISIS remains a serious, adaptive threat, especially across Africa’s Sahel and Lake Chad Basin. Culture & Loss: Iraqi musician Abdul Razzaq Al-Azzawi died in Baghdad, while Kurdish artist Mozaffar Shafeie passed away in Turkey after cancer.

Kurdistan-Federal Dialogue: Iraqi Prime Minister Ali al-Zaidi met KRI President Nechirvan Barzani in Baghdad, reaffirming the government’s commitment to resolve all outstanding disputes under the constitution and law, with both sides stressing unity, sovereignty, and tighter coordination on political, economic, and security issues. Regional Security & Deterrence: Al-Zaidi also reiterated Iraq’s policy to prevent any threat or violation from Iraqi territory toward neighboring countries, while foreign ministers discussed regional security and the impact on oil routes amid efforts to reopen the Strait of Hormuz. U.S.-Iraq Sanctions Relief: The U.S. Treasury lifted sanctions on Iraq’s Fly Baghdad after the airline’s behavior changed, while stressing there is no shift in U.S. policy toward Iran or the IRGC. Energy Deals: Iraq topped Arab oil and gas agreements in July, including major contracts tied to raising crude output and expanding gas infrastructure, following Al-Zaidi’s Washington engagement. International Diplomacy on Jerusalem: Arab foreign ministers met in Amman and issued a joint stance condemning Israeli measures in occupied East Jerusalem and calling for coordinated international action.

Arbaeen & Religious Tourism: Iraq is seeing record Arbaeen crowds in Karbala—nearly 20 million visitors and thousands of Hussaini processions—yet shrine-city economies report “thin returns,” with spending squeezed by regional war pressures and Iran’s economic fallout. Public Finance & Salaries: Iraq’s oil export disruption tied to the continued closure of the Strait of Hormuz is reportedly delaying July salary payments for public employees, with officials warning cash-flow may force pay cycles to stretch. Oil Exports & Hormuz Transit: Baghdad says it is in talks with Iran to secure safer tanker transit through Hormuz, aiming to prevent further interruptions to exports. Power Sector: Dana Gas and Crescent Petroleum have begun natural gas deliveries from the Khor Mor field to Iraq’s Ministry of Electricity to support generation at the Kirkuk Taza power station. Regional Security: Iraq and Syria are coordinating border monitoring after reports of Syrian troop deployments near the Iraqi frontier. Turkey-PKK Peace Law: Turkey is set to submit a draft law to parliament to enable the disbandment of the PKK by managing the return and reintegration of former militants from northern Iraq.

Iraq’s Liquidity Watch: Iraq’s currency in circulation climbed to 113.560 trillion dinars (about $86.3B) in May 2026, up 13.8% from end-2025, as officials point to revenue gaps, oil-flow disruptions, and delayed salaries pushing the Central Bank toward short-term liquidity measures. Arbaeen & National Unity: Kurdistan Region President Nechirvan Barzani urged Iraqis to strengthen unity and cooperation during Arbaeen, linking the pilgrimage to sacrifice and justice; meanwhile, Karbala officials said more than 22 million entered the city, including about five million foreign visitors. Strait of Hormuz Diplomacy: Washington says talks are making progress via Oman-Iran discussions, while Iran insists only Tehran and Muscat can manage passage and rejects U.S. interference—keeping pressure on Iraq’s oil transit plans. Regional Security Shock: A reported IRGC drone attack hit a U.S. base in Kuwait, with blasts also heard in Iraq’s Basra, underscoring how Iraq’s border provinces remain pulled into the wider Iran-U.S. confrontation. KRG Political Violence: In Erbil, gunmen critically wounded the son of a Kurdish opposition military leader, deepening uncertainty over who is striking Iraqi Kurdistan. Economic Signals: Saudi Aramco reported a 33% profit jump in Q2, citing higher energy prices amid the Iran conflict and use of routes bypassing Hormuz—highlighting the market ripple Iraq is feeling.

Gulf Security Debate: A new argument is building that the Gulf can’t keep outsourcing its security; analysts say the region needs a real “security ecosystem” as ceasefires keep collapsing into renewed strikes and closed chokepoints. Shengal Anniversary: Yazidis marked the 12th anniversary of the ISIS genocide across Shengal, renewing calls to find missing women and children, identify mass graves, and bring perpetrators to justice. Iraq’s Arbaeen Under Tension: Millions joined Arbaeen in Karbala as Iraq tries to balance ties with Washington and Tehran amid fears of renewed US-Iran escalation; Iranian FM Abbas Araghchi attended. US-Iran Talks Clash: Trump says talks are underway and Hormuz could reopen soon, but Iran denies direct negotiations and says it’s only discussing a route with Oman—leaving diplomacy uncertain. Cross-Border Attack Prevention: Baghdad announced tighter security and a joint committee to stop rockets or drones launching from Iraqi territory, after regional warnings and fears of retaliation. Iraq-Turkiye Energy Move: With Hormuz disruptions, Iraq and Türkiye push oil export routes via the Kirkuk-Ceyhan pipeline to keep flows moving. Resistance Stance: Kataib Hezbollah reiterated it will not give up its resistance weapons, framing the next phase as deterrence through both military and media pressure.

US-Iran Diplomacy Clash: President Trump says talks with Tehran will begin soon and calls it Iran’s “last chance” to reopen the Strait of Hormuz, but Iran’s foreign ministry says there are no US talks and that discussions are only with Oman over a temporary shipping route. Oil & Shipping Pressure: Oil prices slid as the standoff dragged on, while Iraq’s oil officials said Baghdad is in discussions with Iran to protect tanker passage through Hormuz. Kurdistan Security & Crime: In Al-Sulaymaniyah, Kurdistan security forces arrested six suspected drug traffickers in separate operations, seizing marijuana, opium, pills, and syringes. Yazidi Memory & Missing Persons: On the 12th anniversary of the Sinjar genocide, KCK marked Aug. 3 and renewed calls to ensure Yazidis are never targeted again, with thousands still missing. Arbaeen Unity Messaging: Iran’s foreign minister and senior officials used Arbaeen to stress Iran-Iraq unity and cooperation, as preparations in Najaf and Karbala draw massive crowds. Regional Kurdish Talks: SDF commander Mazloum Abdi praised KRI President Nechirvan Barzani’s Damascus visit as a boost for Kurdish issues and Syria’s stability. Road Safety: A vehicle overturn on the Dhi Qar–Basra highway killed four Arbaeen pilgrims and injured two.

Iraq-Iran Diplomacy: Iraqi Foreign Minister Fuad Hussein spoke by phone with Iran’s Abbas Araghchi on Strait of Hormuz developments, with Baghdad urging dialogue and warning against steps that could escalate tensions, while Iran said talks are with Oman and not the US. Regional Security: Iraq’s Ministerial Council for National Security, chaired by PM Ali al-Zaidi, ordered strict measures to stop any attacks launched from Iraqi territory against neighboring states, including forming a joint security committee and stressing Iraq will not be a launchpad. Kurdistan & Sinjar: KRG President Masrour Barzani renewed calls for Baghdad to implement the Sinjar Agreement to enable the safe return of Yazidis, as Iraq marked the 12th anniversary of the Yazidi genocide and PM al-Zaidi pledged justice, uncovering abductees’ fate, and rebuilding Sinjar. Arbaeen Update: Iraqi authorities said 4,887,660 foreign pilgrims entered Iraq since Muharram, with security and logistics plans under PM supervision. Energy & Trade: OPEC+ approved a September production increase of 188,000 bpd, while Iraq also pushed oil export routes via Türkiye amid Hormuz disruption fears. Yemen Escalation Watch: Reports of Saudi contingency planning against Yemen’s Houthis revived worries of a wider Red Sea front.

US-Iran De-escalation: President Trump says he will halt new strikes on Iran, linking the pause to “Immediate, Complete, and Total” reopening of the Strait of Hormuz and an end to Iran’s nuclear threat—while Iran insists Hormuz will not return to pre-Feb. 28 conditions and says talks with Oman are about shipping, not full reopening. Baghdad Security Claims: Iraq’s Security Media Cell denies reports that US aircraft landed at Ain al-Asad, calling the claims false. Weapons-Deal Pressure: A report says Washington conditioned release of $30B in frozen Saddam-era guarantees on Iraq bringing all weapons under state control. Regional Tensions Spill Over: Iraq condemned a drone strike on two vessels at Egypt’s Damietta port and rejected claims that Iran was behind it. Arbaeen Hospitality & Numbers: Iran’s Supreme Leader praised Iraqi Arbaeen hosting; Iraq says millions entered for the pilgrimage and highlights state transport and funding. Domestic Governance & Economy: Salary delays are reigniting debate over the Central Bank’s limits as oil revenues fall; Iraq also faces fiscal strain. Corruption & Reform: Ammar al-Hakim backs al-Zaidi’s anti-corruption push through legal frameworks. Environment in Focus: Diyala sued its main women’s and children’s hospital over alleged medical-waste incinerator violations. NATO Presence: NATO and Iraq agreed to open a specialized Baghdad office to reduce recurring regional crises. Oil Development: Iraq moves to seek partners to overhaul the Qayyarah heavy-oil project via competitive bidding.

US-Iran Brinkmanship: Trump says he will pause new US strikes on Iran, claiming allies have agreed “rapidly” on deal parameters that include the “immediate, complete and total” opening of the Strait of Hormuz and an end to Iran’s nuclear threat, while Iran rejects the idea of a requested pause and stays on high alert. Regional Security Pressure on Iraq: Jordan warns it will strike Iran-backed militias if they attack Jordan, and Iraq’s PM Ali al-Zaidi orders deterrent measures and a joint security committee to stop attacks from Iraqi territory, after US-Saudi strikes hit logistics sites tied to Iran-backed groups. Iraq-Türkiye Oil Lifeline: Ankara and Baghdad extend the Kirkuk–Ceyhan crude pipeline deal for one year, guaranteeing at least 750,000 barrels per day and pushing a broader framework for oil, electricity, and water cooperation. Arbaeen Mobilization: Iraq ramps up transport and security for Arbaeen in Karbala, adding buses and rail services to move millions of pilgrims. Kirkuk-Turkic Politics: Kirkuk’s move to join the Turkic municipalities union sparks debate over transparency and local benefits. Yazidi Commemoration: Kurdistan leaders reaffirm support for Yazidis during their summer festival, as communities mark ongoing persecution and resistance.

Regional Security: The U.S. State Department issued fresh highest-level alerts to Americans in Iraq and across the Middle East after President Trump warned the U.S. will hit Iran “very hard,” with embassies urging citizens to consider departing amid possible escalation, airspace closures, and travel disruptions. Sovereignty & Deterrence: Iraqi Prime Minister Ali al-Zaidi ordered a joint security committee and “deterrents” to stop attacks launched from Iraqi territory toward neighboring countries, after recent cross-border accusations and U.S.-Saudi strikes on Iran-aligned PMF sites. Energy Diplomacy: Iraq and Türkiye signed a one-year deal to keep crude exports flowing via the Kirkuk–Ceyhan pipeline, targeting a minimum 750,000 bpd and aiming to expand volumes as Hormuz disruptions pressure shipping routes. Local Politics: Kirkuk officials are debating the province’s move to join the Union of Turkish World Municipalities, demanding clarity on commitments from Ankara talks. Culture & Law: Iraq referred an archaeologist for investigation after he alleged Kuwait’s ruling family displayed the “Bronze Goat” in a regional exhibition, amid claims of political pressure to avoid straining ties. Humanitarian Care: Kurdistan’s al-Sulaymaniyah shelter is housing 65 separated children with education and support services.

US-Kuwait Footprint Review: The Pentagon is weighing a smaller US presence in Kuwait after Iran-linked missile and drone attacks made the deployment look like a liability, even as Kuwait still sees it as necessary for defense. Air-Defense Push in Iraq: After US-Saudi strikes on Iran-backed militias, Baghdad says modernizing air defenses is a top priority—an effort it has promised before. Regional Escalation Risk: Iraqi and Saudi analysts warn the conflict could pull Iraq into a wider regional war as Baghdad struggles to control weapons outside state institutions. Iraq Orders Readiness Boost: Iraq raised alert levels across air defenses and intelligence after the strikes, with plans for radar and early-warning upgrades. Oil and Exports: Iraq’s Oil Minister heads to Türkiye to finalize expanded crude export routes via the Iraq-Türkiye pipeline to Ceyhan, aiming to reduce reliance on traditional transit amid Hormuz disruptions. Arbaeen Under Tension: Iranian pilgrims are flooding into Iraq for Arbaeen as fresh strikes keep the region on edge. Christian Return Plan: Iraq’s bishops will assess a government scheme to encourage Christian families to return, including support tied to housing land projects. Baghdad Housing Strain: Many newlyweds in Baghdad are moving in with relatives as rents climb beyond reach.

U.S.-Saudi-Iran Tensions: Iraq is facing fresh escalation after US-Saudi strikes hit Iran-backed armed groups in Iraq, with Baghdad ordering probes, raising nationwide military alert, and rejecting claims of “approval” or “prior knowledge,” while Saudi officials insist the targets were militias—not the Iraqi state—sparking warnings from Syria that strikes from Iraqi soil could trigger Syrian retaliation. Regional Diplomacy: Turkish FM Hakan Fidan held talks with Saudi counterparts as the Iran war widens, while President Barzani met Taqaddum leader Mohammed al-Halbousi to discuss Erbil-Baghdad coordination. Security & State Authority: Reports say Prime Minister Ali al-Zaidi threatened to resign over militia disarmament delays, as Iraq pushes a new security strategy to stop weapons outside state control. Economy Under Pressure: Iraq’s oil-driven budget strain is worsening, with officials warning salary and healthcare financing gaps. Arbaeen Logistics: Iraq expects around 22 million pilgrims for Arbaeen, with major transport and security preparations underway, including heavy activity at Najaf International Airport.