A government advisor responds to Parliament: There is no financial crisis in Iraq, and hedging is a necessity.

The advisor to the Iraqi Prime Minister, Mazhar Mohammed Salih, confirmed on Wednesday that talk of a financial crisis in the country is nothing more than “mere rumors,” stressing the need for “cautionary” economic policies in light of the current international circumstances.

Saleh told Shafaq News Agency, “The country relies on oil revenues to finance public expenditures, accounting for up to 90% of total revenues, while government spending constitutes approximately 50% of GDP, which translates into approximately 85% of total demand, or spending on economic activity.”

He added, “All these indicators so far do not point to a crisis, as rumored, thanks to the wisdom of fiscal policy. However, there are concerns that must be addressed within the framework of general economic policy, especially in light of the repercussions of trade wars and the stumbling global energy markets, in order to preserve the country’s state of prosperity.”

Saleh explained that “the oil market is at the beginning of a downward asset cycle, and close coordination is taking place between fiscal and monetary policies to confront external challenges, by tightening fiscal discipline on both revenue and expenditure, in addition to cooperating with monetary policy to finance the deficit without affecting expenditures, and in a stable climate supported by financial leverage that partially compensates for the decline in oil revenues, within what is called the ‘policy of good fiscal management’, until the global energy market stabilizes and the temporary effects disappear.”

He pointed out that “the talk of a financial crisis is merely a rumour. Since 2014, Iraq has been accustomed to dealing with such oil cycles and has successfully managed economic stability smoothly by ensuring the provision of salaries, pensions and social welfare, supporting agricultural prices, and strengthening partnerships with the private sector in development projects through financing guarantees and sovereign guarantees monitored centrally, in line with the vision of the government’s reform programme.”

Saleh emphasized that “securing public liquidity to meet the country’s needs is a top priority, and there is successful central management of this issue, and there are no concerns about this matter.”

The Parliamentary Finance Committee had previously warned of a potential financial crisis facing Iraq in the future, given the decline in oil prices and the lack of adequate preventative measures to avert economic crises.

The Parliamentary Finance Committee affirms that Iraq’s financial hedging tools are limited and insufficient for more than two years, emphasizing the need to diversify non-oil revenues.

For their part, experts blamed the Ministry of Finance and the Central Bank for the weak monetary cycle and the loss of confidence in banks. This comes at a time when the money supply in circulation has reached approximately 127 trillion dinars, 70% of which is outside the banking system. Official data also showed a 15% decline in oil revenues in April, deepening the crisis and increasing pressure on the strategic reserve.

Shafaq.com

The Silent Landing… The Hidden Factors That Led to the Dollar’s Fall in Baghdad

May 2025 witnessed one of the most exceptional periods of volatility in the US dollar exchange rate against the Iraqi dinar. The dollar’s value declined gradually and dramatically, sparking a wave of questions in the market and prompting experts to deconstruct the reasons behind this sudden shift.

In this context, Nawar Al-Saadi, a professor of economics at Cihan University in Duhok Governorate, presented a detailed analysis of this decline to Baghdad on Tuesday (May 27, 2025), explaining that the phenomenon cannot be attributed to a single cause, but rather is the result of a combination of monetary, commercial, behavioral, and even regional political factors.

The market is saturated with dollars. Where did the surplus come from?

Al-Saadi says that the most notable thing is that “the supply of dollars has become higher than usual, but not because of the increase in oil revenues, as is believed, but rather as a result of other factors, most notably the increase in remittances from foreign companies and non-oil investments, in addition to reverse dollar smuggling operations from neighboring countries facing a shortage of hard currency.”

This “temporary flood” of dollars, as he described it, created a state of saturation in the Iraqi market, making the dollar more available than demand, thus driving its price down.

Citizen behavior has changed. Has the dollar lost its place in savings?

But the situation isn’t solely explained by the traditional supply and demand equation, but also by people’s behavior, as Al-Saadi explains, adding that “Iraqi citizens are beginning to lose confidence in the dollar as a savings instrument, not because it is weak globally, but because the dinar has begun to show stability and tangible gains.”

This shift prompted many to sell their dollars and convert them into dinars or gold, which contributed to increasing the supply of dollars and reducing demand for them, thus indirectly supporting the dinar.

The Central Bank intervenes… and absorbs liquidity

Al-Saadi believes that “the Central Bank of Iraq’s policy played a pivotal role in the situation,” explaining that the monetary institution reduced the money supply by more than 6 trillion dinars in just a few months, a move that falls within what is known as “liquidity absorption.”

This policy, according to his analysis, led to a reduction in the amount of dinars available in the market, which increased its value against the dollar and created a deflationary environment that helped control inflation and boost citizens’ confidence in the local currency.

Imports shrink… and the trade map changes

According to Al-Saadi, a significant part of the exchange rate decline is also linked to a decline in imports from some major countries, such as India, Turkey, and the United States, despite a notable exception in imports from China. This decline can be explained either by a decline in domestic consumption or by a reshuffling of spending priorities.

In both cases, demand for the dollar used to pay for imports declines, creating a relative surplus in the domestic market and putting downward pressure on the price.

Behind-the-scenes negotiations: Has demand for the dollar declined in Iranian trade?

What’s striking about Al-Saadi’s reading is his analysis of what he calls the “silent regional factor,” suggesting the possibility of unannounced negotiations between Tehran and Washington that have eased financial restrictions, leading to a decline in the need for dollars in some informal trade (between Iraq and Iran).

This decline, he said, reduced demand for hard currency, which was used to finance shadowy and opaque activities, which was reflected in the local market, resulting in an abundance of dollars and a decline in their value.

Will the decline continue? The future depends on two factors.

Despite this significant decline, Al-Saadi is not certain that the trend will continue in the long term, stating that the future of the dollar’s value in Iraq “depends on two factors”: the continuation of the current strict and stable monetary policy, and the Iraqi market’s ability to maintain the flow of hard currency, free from speculation or regional crises.

Al-Saadi concludes his analysis by warning that any disruption to these equations could send the market back to zero, emphasizing that “trust is built not only through policies, but also through continuity and transparency.”

Burathanews.com

Iraq to be OAPEC’s second-largest oil exporter by 2025

The Organization of Arab Petroleum Exporting Countries (OAPEC) announced on Tuesday that Iraq ranked second among the largest crude oil exporters among member states during the first quarter of 2025.

According to a report reviewed by Shafaq News Agency, Iraq’s exports reached 3.35 million barrels per day, placing it second after Saudi Arabia, which topped the list with exports reaching 5.89 million barrels per day. The UAE came in third place with a total of 2.86 million barrels per day, followed by Kuwait with exports amounting to 1.32 million barrels per day.

He added that “Libya ranked fifth with average exports of 1.18 million barrels per day, while Qatar came in sixth with 605,000 barrels per day, and Algeria ranked last with exports of 378,000 barrels per day.”

Regarding global oil trade, the report indicated that the United States maintained its position as a net importer of crude oil, but continued to be a net exporter of petroleum products, with its net exports of crude oil and its derivatives reaching approximately 2.7 million barrels per day during the first quarter of the year.

In contrast, China’s net oil imports fell by approximately 385,000 barrels per day, settling at 10.7 million barrels per day, while India’s imports rose by 3.3% quarter-on-quarter, reaching 4.6 million barrels per day.

It is worth noting that OAPEC was established on January 9, 1968, by agreement between Saudi Arabia, Kuwait, and Libya. Its headquarters are in Kuwait, and its founding members include Algeria, Iraq, Qatar, the United Arab Emirates, Bahrain, Syria, and Egypt.

Shafaq.com

Erbil-Washington agreements revive hopes for reviving the Iraq-Turkey oil pipeline.

Following the energy agreements concluded by the Kurdistan Regional Government with American companies, attention is turning to the tense relationship between Erbil and Baghdad. A breakthrough between the two could accelerate the resumption of the Iraq-Turkey pipeline, which has been halted for years, amid the momentum of regional energy diplomacy, according to the Turkish Anadolu Agency.

After a report by the Turkish agency, translated by Shafaq News Agency, indicated that Kurdistan Regional Government Prime Minister Masrour Barzani had announced, during recent talks in Washington, the signing of energy deals worth $110 billion with the American companies HKN Energy and Western Zagros, the report said that these agreements constitute an important step in strengthening economic relations between the United States and the region.

While the report noted that Baghdad rejected these agreements on the grounds that all investment decisions related to natural resources must be coordinated with the government, as stipulated by the constitution. Therefore, the agreements were deemed invalid, it noted that Kurdistan Regional Government officials assert that these agreements are based on legal precedents.

Meanwhile, the report quoted analysts as saying that the importance of these agreements lies not only in the context of US-Kurdish relations and regional energy security, but also as a potential catalyst for resuming stalled negotiations between Erbil and Baghdad, which could lead to the resumption of oil flows through the Iraq-Türkiye pipeline.

The report addressed the long-standing disputes between Erbil and Baghdad over control of oil revenues, authority over the energy sector, and the region’s share of the federal budget. It added that ongoing political and legal disputes between the two continue to hamper oil exports, resulting in losses estimated at approximately $20 billion.

However, the report noted that a reconciliation between Erbil and Baghdad could open the door to broader cooperation in the energy sector. It quoted Sercan Çalıkan, a researcher on Iraqi affairs at the Center for Middle Eastern Studies (ORSAM), as saying, “Such a reconciliation, following recent agreements between the United States and the region, could pave the way for resolving broader regional energy-related conflicts.”

While Çalıkan noted the strategic importance for Turkey of resuming oil exports via the Kirkuk-Ceyhan pipeline, the report quoted Çalıkan as saying, “Agreement on energy sharing and export infrastructure could accelerate negotiations between Baghdad and Erbil and help resume the technical operations necessary for the resumption of oil flow.”

According to Çalıkan, it is likely that if an agreement is reached, Turkey will continue its support for resolving these disputes and promoting political stability in Iraq, while resuming exports through Turkish territory will enhance regional energy security. He added that “achieving the goal of $30 billion in trade between Turkey and Iraq requires political consensus, along with technical and institutional coordination.”

The report quoted Çalıkan as saying, “Ensuring internal political stability and achieving economic sustainability in Iraq is crucial to advancing major strategic initiatives such as the ‘Development Road’ project, which is considered a significant strategic gain for Turkey.”

The report also quoted Brik Montgrenier, Executive Director of the European Energy Security Initiative, as saying that the recent energy agreements between the United States and the Kurdistan Region are important for energy security in the region. He noted that developing these fields could lead to a significant increase in gas production, and thus in electricity generation, and could allow the region to “sell surplus energy to other parts of Iraq.”

According to Montgrenier, this $110 billion investment reflects strong investor confidence in the region and could open the door to additional foreign investment.

However, the Executive Director of the European Energy Security Initiative warned that the Baghdad government’s rejection of these deals could complicate ongoing negotiations regarding oil exports via Turkey. He explained that “if these deals are threatened or canceled, this will not only harm the negotiations but will also negatively impact investor confidence and threaten electricity security in the region.”

Yassar Al-Maliki, a Gulf affairs analyst for the Middle East Economic Bulletin, was quoted in the report as saying that Baghdad’s rejection of recent energy agreements between Erbil and American companies stems from the lack of a comprehensive energy agreement between the two parties. He also noted that the Iraq-Turkey pipeline agreement, last amended in 2010, is due to expire this year, which presents an opportunity to renegotiate it.

The report quoted Maliki as saying, “This also coincides with the parliamentary elections in Iraq, and we may see a comprehensive political settlement before or after the elections as part of the government formation process.”

The report concluded by recalling that the current agreement regulating the Kirkuk-Yumurtalik pipeline, with a protocol, was signed between Türkiye and Iraq on September 19, 2010, and has been extended for 15 years.

Shafaq.com

A qualitative leap in “financial incentives” at Iraqi ports

The General Company for Ports of Iraq announced on Wednesday an unprecedented increase in financial incentives allocated to its employees after achieving record operational and revenue results during the first quarter of 2025.

Abbas Ali Hussein, the company’s director of internal audit and control, told Shafaq News Agency, “The financial incentive allocated to each employee has witnessed a significant leap compared to 2020,” noting that “the value of one point, which ranged between 6,000 and 7,000 dinars five years ago, has now increased to between 20,000 and 23,000 dinars.”

He explained that “this development is a direct result of the significant growth in revenues and reflects senior management’s appreciation for the efforts made by employees across the company’s various departments.” He noted that “the new incentive system is based on linking individual performance with corporate returns, which motivates improvements to the work environment, fosters a culture of achievement, and enhances productivity.”

Hussein added, “Iraqi ports are moving steadily toward modernization and development by implementing infrastructure projects and upgrading electronic systems and logistics services in line with international standards adopted in the maritime transport sector.”

The General Company for Iraqi Ports announced last Monday that the Khor al-Zubair oil port will receive 207 oil tankers during the first quarter of 2025.

Shafaq.com

Iraq welcomes Trump’s visit to Saudi Arabia and considers the Riyadh and Baghdad summits complementary.

Foreign Minister Fuad Hussein affirmed on Wednesday that Iraq welcomes US President Donald Trump’s visit to Saudi Arabia. While announcing that Iraq will chair three Arab summits, he pointed to “tremendous” efforts being made to organize the Baghdad Development Summit.

“We are pleased with Trump’s visit to the region and the understandings reached, and we are also pleased with the lifting of sanctions on the Syrian people,” Hussein said during a press conference attended by a Shafaq News Agency correspondent.

Regarding the Baghdad Development Summit, Hussein explained, “Today we will highlight the tremendous work undertaken by the Higher Committee charged with preparing for the Arab Summit, with the participation of numerous Iraqi government departments.”

He added, “The participation of leaders and officials in these exceptional circumstances the region is experiencing demonstrates the unity of Arab leaders in our current situation and their support for Baghdad’s investment renaissance.”

He added, “Twenty Arab organizations and federations will participate in the summit, in addition to international organizations represented by the Secretary-General of the United Nations, the Secretary-General of the Organization of Islamic Cooperation, the President of the African Union, and a representative of the European Union. The guest of honor will be Spanish Prime Minister Pedro Sanchez.”

He continued, “There are also more than 250 Arab and foreign journalist guests and dozens of Arab and foreign figures in Baghdad.”

Hussein affirmed, “Baghdad has focused its efforts on supporting the Arab Summit and providing full support, holding 16 meetings of the Supreme Administrative Committee. Iraq is proud to have hosted three summits: the 34th Arab League Summit, which Bahrain was honored to host last year, and now Iraq is honored to host it in Baghdad.”

He added, “The second summit of the fifth session of the Economic and Social Development Summit, which is held every four years, and we will be honored to chair it from the State of Lebanon.” He added, “The third summit is at the leaders’ level, and Iraq will assume the presidency of the three summits. Iraq is now the president of the Arab Summit for next year.”

Regarding the Baghdad Development Summit, Hussein explained, “There will be two sessions next Saturday. The first will begin in the morning for the Arab League Council session, and the second will be in the afternoon for the fifth development summit.”

He added, “The two summits will issue the Baghdad Declaration, which includes the joint Arab position on economic, social, and development interests, and focuses on the regional challenges facing the region, most notably an immediate ceasefire in Gaza and the opening of crossings for humanitarian aid. The countries have presented their views on the items under discussion.”

Hussein announced, “It is hoped that political initiatives will be put forward to establish the Arab Center for Combating Terrorism and the Arab Center for Regional Crime.”

Shafaq.com

Al-Sudani: Iraq is an oil and industrial country that has the potential to export products to the region.

Prime Minister Mohammed Shia al-Sudani described Iraq on Wednesday as an “industrial country,” not just an oil country, and that it can meet the needs of the local market and countries in the region.

This came in a speech delivered via video link during the inauguration of the steel plant at the General Company for Iron and Steel in Basra Governorate, with a capacity of 600,000 tons annually. He also launched the implementation work for the industrial city in Al-Zubair District, and the Basra Chlorine and Caustic Soda Production Plant Project.

Al-Sudani said in his speech, “Iraq, in addition to being an oil-producing country, is an industrial country that possesses all the ingredients for the emergence of a national industry that meets the needs of the local market. We have qualified to become a country that exports products to the rest of the countries in the region.”

Shafaq.com

The Emir of Kuwait to Trump: We will not forget your stance with us in responding to the Iraqi aggression.

On Wednesday, the Emir of Kuwait, Meshal Al-Ahmad Al-Jaber Al-Sabah, praised the US support for his country during the Iraqi invasion in 1990, addressing Trump, saying, “We will not forget your position.”

During a speech he delivered at the Gulf-US summit held in the Saudi capital, Riyadh, Al-Sabah affirmed his country’s support for international efforts to ensure the security and protection of Syria. He also called for an end to foreign interference in Syria’s internal affairs.

Al-Sabah also proposed “establishing a Gulf-American forum for cultural and educational dialogue with the aim of supporting academic exchange programs between the United States and the Gulf Cooperation Council countries,” praising US President Donald Trump’s decision to “lift sanctions on Syria.”

He expressed his hope that this summit would be the beginning of an end to the region’s concerns, also stressing “the necessity of establishing a Palestinian state based on the Arab Peace Initiative.”

Al-Sabah addressed Trump, saying, “We will never forget your support in responding to the brutal Iraqi aggression in 1990,” praising the American support provided to his country over the decades.

On Wednesday, Saudi Crown Prince Mohammed Salman opened the Gulf-US summit in the Saudi capital, Riyadh, which discussed key regional issues.

The summit opened following a virtual quadrilateral meeting between Turkish President Recep Tayyip Erdoğan, his US counterpart Donald Trump, Saudi Crown Prince Mohammed bin Salman, and Syrian President Ahmed al-Sharaa.

Shafaq.com

Al-Maliki: We hope Arab leaders will pay attention to what will be presented at the Baghdad summit.

On Wednesday, the head of the State of Law Coalition, Nouri al-Maliki, addressed a request to the Arab leaders participating in the Arab Summit, stressing that holding the summit more than once in Iraq proves that the country wants to contribute to addressing the “nation’s affairs.”

In a speech he delivered on the occasion of the Arab Summit in Baghdad, as reported by Shafaq News Agency, Maliki said, “Holding the Arab Summit in Baghdad once again proves that Iraq is a true and genuine partner with Arab leaders in confronting challenges.”

He added that “holding the Arab Summit in Baghdad is evidence of Iraq’s commitment to its role and obligations,” noting that “the Arab world is experiencing internal and external challenges because it is an essential and vital part of the region and the world.”

He continued, ” The challenges facing the region require a summit like this, where Arab leaders meet in their second homeland, Iraq, to ​​confront developments and challenges.” He emphasized that “Iraq’s hosting of the Arab Summit more than once proves that Iraq wants to contribute to addressing the nation’s affairs and interact with them.”

He pointed out that ” we hope that the Arab countries participating in the summit will unite to confront the challenges, away from problems and disagreements ,” adding, ” We hope that our Arab leaders will pay attention to the demands that will be presented at the Arab summit.”

He added, ” There must be meetings of the ministers of foreign affairs, reconstruction, and economy, so that the summit can bear important fruits that shape the wills of the countries.” He continued, “We hope that the summit will be successful and effective, establishing a stage of communication and integration to confront the challenges facing all.”

Shafaq.com

Over a billion dinars in exchange rate difference.. Kurdistan pilgrims receive $2,000 at subsidized rate

The General Authority for Hajj and Umrah in the Kurdistan Region announced on Wednesday the start of disbursing $2,000 to each pilgrim at an exchange rate of 132,000 Iraqi dinars per $100, through visiting Cihan Bank branches.

The authority explained, in a statement received by Shafaq News Agency, that this amount in dollars was transferred by the Federal Central Bank to Cihan Bank and will be exchanged at the official approved rate, with each pilgrim being given 20 $100 bills.

She explained that this mechanism allows each pilgrim to benefit from a difference of more than 200,000 dinars compared to the market price. She noted that the number of pilgrims this year reached 5,136, meaning that the total benefit would exceed one billion Iraqi dinars if all of them exchanged this amount.

The authority confirmed that Cihan Bank has been provided with all necessary information. Each pilgrim is required to visit the bank in person with their passport and Hajj visa, as no one else is permitted to receive the amount on their behalf.

She noted that Cihan Bank branches in Erbil and Sulaymaniyah will provide the service, while pilgrims from Dohuk Governorate must visit the bank’s branches in Erbil for this purpose.

The Authority concluded its statement by noting that the review will be available during three periods daily: morning from 9 am to 12 pm, evening from 3 pm to 5 pm, and night from 7 pm to 10:30 pm.

Shafaq.com