Sunday, May 24, 2026

FRANK26….5-22-26….SHIFT

 

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⚠️ Iraq is learning the hard way why economic diversification was necessary 🛢️📉

 Iraq has not submitted any formal request for a new loan facility from the International Monetary Fund (IMF), the Financial Advisor to the Prime Minister, Mazhar Mohammad Salih, confirmed on Saturday.

The financial advisor underscored the extreme economic headwinds confronting Baghdad due to escalating regional warfare. Read more: channel8.com/english/news/5

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⚠️ Iraq is learning the hard way why economic diversification was necessary 🛢️📉

Iraq’s current situation sends a very clear message: relying almost entirely on oil revenue eventually becomes a major vulnerability. While the government stated that it has not requested a new IMF loan, the economic pressure the country is facing shows just how fragile an economy can become when most of its income depends on a single resource. 🌍🔥

Regional tensions, risks to oil exports, and growing geopolitical uncertainty are putting Baghdad under serious financial pressure. And right now, Iraq is seeing in real time why experts and officials have long warned about the urgent need to diversify the country’s sources of income. When oil becomes the main pillar supporting the state, any external shock can threaten salaries, subsidies, currency stability, and public investment. 💸 ⚡

Iraq is now learning this lesson the hard way. For years, oil wealth allowed structural reforms to be delayed, but today’s regional instability is forcing the government to move faster on economic transformation. That is why leaders within the government, including the direction pushed by Mohammed Shia Al-Sudani, are increasingly focusing on diversifying revenues ASAP by investing in sectors such as infrastructure, industry, energy, logistics, agriculture, and tourism. 🏗️🌱🚢

The bigger lesson is simple: oil can generate wealth, but it does not guarantee long-term stability. Countries that fail to diversify while they still have strong resource income often become extremely vulnerable once a major crisis hits. Iraq is now experiencing that reality firsthand. ⏳🌎

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#Iraq #Economy #Oil #Geopolitics #IMF #MiddleEast #EconomicCrisis #Energy #GlobalEconomy #Diversification #Finance #Markets


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🧭 Erbil–Baghdad Issues & the Hydrocarbon Law (HCL): What It Really Means for Iraq 🇮🇶

 CHANNEL8

Masrour Barzani met with Mohammed al-Halbousi in Baghdad, during which the leader of the Taqaddum Party stressed his party's “support for the constitutional rights of the people of Kurdistan” and the resolution of Erbil-Baghdad issues.



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🧭 Erbil–Baghdad Issues & the Hydrocarbon Law (HCL): What It Really Means for Iraq 🇮🇶

Many times when people talk about “resolving the Erbil–Baghdad issues,” they are referring to progress toward or a final resolution of the Hydrocarbon Law (HCL) ⚖️.

The HCL would essentially serve as Iraq’s national legal framework for oil and gas, defining:

• 🛢️ Who controls Iraq’s oil and gas resources
• 💰 How oil revenues are shared between the federal government and the Kurdistan Region
• 🏛️ The level of autonomy the Kurdistan Region has in energy decisions
• 📑 How oil contracts with international companies are structured and approved
• 📊 How the federal budget is distributed between Erbil and Baghdad

This is why the issue has remained one of the most important and long-standing disputes in Iraq. The core tension between the federal government and the Kurdistan Region is largely centered on oil management and revenue distribution.

However, the “Erbil–Baghdad issues” are broader than just the HCL. They also include:

• 💵 Delayed or disputed salary payments for the Kurdistan Region
• 🧾 Federal budget allocations and approvals
• 🚛 Oil exports through Turkey (Ceyhan pipeline)
• 🔁 Revenue-sharing mechanisms and financial transfers
• 🚧 Control of borders and customs revenue
• 🗺️ Disputed territories such as Kirkuk
• 🤝 Broader political and constitutional agreements between both sides

Because of this, many analysts view the Erbil–Baghdad relationship as a key pillar of Iraq’s overall stability.

💬 Personal opinion:


It is also well analyzed that the HCL is not fully functional or sustainable without an appropriate and stable value of the Iraqi dinar. 

From this perspective, if such a law were implemented under the current exchange rate environment, it could create serious economic pressure, particularly in relation to de-dollarization efforts, liquidity management (reducing excessive cash circulation), the transition toward more controlled digital financial systems, and maintaining inflation within single-digit targets.

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#ErbilBaghdad #Iraq 🇮🇶 #HydrocarbonLaw #HCL #IraqOil 🛢️ #Baghdad #Erbil #EconomicStability 📊 #IraqiDinar 💹

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Saturday, May 23, 2026

HCL may need a stronger Iraqi dinar due to inflation, cash control & reform pressures #iqd #HCL#iraq

 


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WHEN WILL DOLLAR SHIPMENTS ARRIVE IN BAGHDAD? WASHINGTON IGNORES THE CENTRAL BANK, WHILE AL-ZIDI PRIORITIZES IT

 In my view, the government of Al-Zaydi has a key opportunity to rethink Iraq’s economic model and seriously consider proposals that strengthen the country’s financial sovereignty. Iraq’s dependence on the U.S. dollar exposes it to fluctuations in U.S. policy and external control mechanisms that can impact its economic stability.

Exploring alternatives that increase the use of the Iraqi dinar and reduce this dependency would not only be a step toward greater autonomy, but also toward a more balanced economy that is less vulnerable to external pressure. In that sense, any discussion about monetary diversification or strengthening the dinar should be seen as part of a broader strategy for national sovereignty and long-term stability.

Government Advisor discusses feasibility of using Dinar instead of Dollar for oil sales

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WHEN WILL DOLLAR SHIPMENTS ARRIVE IN BAGHDAD? WASHINGTON IGNORES THE CENTRAL BANK, WHILE AL-ZIDI PRIORITIZES IT

The Asharq Bloomberg website published a report in which a senior Iraqi official, who declined to reveal his identity, stated that addressing the crisis of delayed dollar shipments from the United States to Baghdad, amounting to about $10 billion annually, will be among the priorities of Ali al-Zaidi’s government, in order to avoid destabilizing the exchange market in light of the sharp decline in oil exports due to the repercussions of the Iran war. He confirmed that the Iraqi authorities are trying to find out the reasons for the delay in the latest shipments, but the Central Bank has not yet received any response from the American side.

Earlier, the administration of US President Donald Trump suspended dollar shipments to Iraq and froze funding for security cooperation programs with Baghdad, pressuring it to dismantle Iranian-backed armed factions. The US Treasury Department blocked an air shipment of about $500 million in Iraqi oil revenues held in accounts at the Federal Reserve Bank of New York, according to the Wall Street Journal.

According to banking expert Mustafa Hantoush, speaking to Asharq Bloomberg, Washington is expected to resume sending shipments soon, based on a similar precedent in 2023, at a time when the International Monetary Fund expects the Iraqi economy to shrink by 6.8% this year, with central reserves amounting to $100 billion before the war.

A senior Iraqi official said that addressing the crisis of delayed dollar shipments from the United States to Baghdad will be a priority for the new government to avoid destabilizing the exchange market, especially after the sharp decline in the country’s oil exports due to the repercussions of the Iran war.

Iraq receives a portion of its oil revenues in the form of cash shipments in US dollars, estimated at around $10 billion annually. These funds are distributed in installments arriving via chartered flights at Baghdad Airport, while transfers related to financing foreign trade—which have not been affected by the delays—are managed through official banking channels.

The government official, who spoke to Asharq on condition of anonymity, confirmed that the Iraqi authorities are indeed trying to find out the reasons for the delay in the latest shipments, but the Central Bank has not yet received a response from the American side.

The US State Department confirmed in response to an inquiry from Asharq News’ Washington bureau that dollar shipments to Iraq remain “suspended.” It referred any further inquiries to the Treasury Department and the Central Bank of Iraq. The Treasury Department did not respond to Al-Sharq’s questions about the crisis, while officials at the Central Bank of Iraq could not be reached for comment.

Reuters reported in late April, citing several sources, that the administration of US President Donald Trump had halted a cash shipment worth about $500 million and suspended part of its security cooperation with Baghdad in an attempt to pressure the Iraqi government to reduce the influence of Iranian-backed armed factions, which have launched several attacks on Gulf states since the start of the conflict at the end of February in support of the regime in Tehran.

The stability of the dinar is at stake

Although the value of the shipment represents only a small fraction of the total demand for dollars in the Iraqi market, its delayed arrival and the ongoing crisis could affect the stability of the dinar and widen the gap between the official exchange rate and the parallel market rate, which has only fluctuated within a narrow range since the outbreak of the conflict. Therefore, the official confirmed that the issue will be a priority for Prime Minister-designate Ali al-Zaidi as soon as he officially assumes office. The Iraqi parliament is scheduled to vote tomorrow, Thursday, on granting confidence to the new government.

Iraq is among the countries most affected by the war in the region. The International Monetary Fund (IMF) projects a 6.8% contraction in its economy this year due to its reliance on oil exports through the Strait of Hormuz, which account for 90% of government revenue. A senior IMF official told Asharq Al-Awsat last month that Baghdad’s options for dealing with the crisis until a new government is formed focus on reducing spending and temporarily drawing on the central bank’s reserves, which stood at approximately $100 billion before the war.

Trump had invited al-Zaidi during a phone call at the end of last month to visit Washington after the government was formed, and wished him success “in forming a new government free of terrorism that can provide a brighter future for Iraq and the United States.”

The historical roots of the crisis

Iraqi banking expert Mustafa Hantoush told Asharq that he expects Washington to resume sending dollar shipments soon. He added that the United States had previously suspended these shipments temporarily in 2023 without publicly stating the reasons.

The story of relying on the United States to send dollar shipments to Baghdad dates back to 2003, when then-US President George W. Bush issued an executive order during the American occupation following the overthrow of Saddam Hussein’s regime. This order mandated that all of Iraq’s oil revenues be transferred to a special account called the “Development Fund for Iraq,” managed through the Federal Reserve Bank of New York, ostensibly to protect the funds from lawsuits and use them for reconstruction. Since then, the executive order has been renewed annually, meaning that US approval is required before any funds can be transferred to Baghdad.

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Why the HCL May Require a Stronger Iraqi Dinar: Inflation, Cash Reduction & Monetary Reform Pressures 🇮🇶💵📉

 Many people say the HCL could technically function at the current 1300 IQD exchange rate, but when you look deeper into Iraq’s monetary reforms, that argument becomes harder to defend. 

Iraq has spent years trying to reduce physical cash in the streets, strengthen the banking sector, expand digital payments, control inflation, reduce dollar dependency, and maintain single-digit inflation. Flooding the economy with massive amounts of dinars — even digitally through HCL oil revenue distributions — would still expand the money supply and risk inflationary pressure, directly conflicting with the CBI’s long-term goals of monetary stability and stronger purchasing power.

This is why many believe Iraq ultimately needs a stronger and more efficient dinar before fully implementing the HCL in a meaningful way. A higher-valued currency would allow Iraq to distribute real purchasing power without injecting enormous volumes of currency into the system. It would also align with the CBI’s long-discussed “delete the zeros” project, banking modernization, de-dollarization efforts, and the push toward a more internationally integrated financial system.

At some point, the question becomes:
How can Iraq simultaneously reduce cash circulation, control inflation, modernize the banking system, and distribute meaningful oil revenues to citizens using a weak 3-zero currency without creating contradictions inside its own monetary policy? 👀💵🇮🇶

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Iraq’s Proposed Federal Council Remains Sidelined by 19-Year Legislative Impasse over Draft Oil and Gas Law


The 2007 Draft Oil and Gas Law outlines the foundational principles for establishing a Federal Council to govern Iraq's energy sector and distribute management powers between central and regional authorities. However, the comprehensive framework has never been formally enacted due to a 19-year political deadlock over revenue-sharing and the legislative control of lucrative oil fields.

The draft prepared by the Council of Ministers' Oil and Energy Committee on February 15, 2007, never became law due to nearly two decades of disagreements between the Kurdistan Regional Government and the federal government.

Draft Oil Law Enshrines Iraq’s Constitutional Energy Rights 

The draft explicitly incorporates Article 111 of the 2005 Constitution, affirming that "Oil and gas are owned by all the people of Iraq in all the regions and governorates." 

Furthermore, the draft accurately references Articles 110, 112, 114, and 115 to outline the legal distribution of authority and residual powers between federal and regional governments regarding resource management. 

Proposed Federal Council to Dictate Iraq’s Energy Policy 

The Federal Council is mandated with approving general energy policies and hydrocarbon strategies developed by the Ministry of Oil in coordination with producing regions.

The Council issues regulatory directives for exploration and production contracts, oversees the development of domestic oil fields and transit pipelines, and retains veto authority over any substantive modifications to these plans.

Additionally, the regulatory body is empowered to review active licensing contracts, endorse standardized development and production templates, select specific field models, and establish pre-qualification criteria for foreign energy firms, provided that any contractual revisions preserve Iraq's national equity share.

Council Authorized to Oversee Oil Exploration and Development

The Council is tasked with guaranteeing the exploration and development of oil resources in the best possible way for the public interest and in accordance with international standards. To facilitate its work, it is authorized to resort to the services of an office of independent consultants and local and international experts. 

It can also establish a new internal department and regulations to organize its work, and its members have the right to propose oil-related legislative and policy projects.

Creation of Independent National Oil Company 

To shift the state's energy role from active operation to high-level policy and regulation, the 2007 framework mandates a massive structural reorganization of the country's energy infrastructure. It orders the transfer of all technical and commercial oil activities away from the exclusive control of the Ministry of Oil to specialized entities. 

Most notably, the draft dictates the creation of an independent Iraq National Oil Company (INOC) to spearhead operational duties while granting distinct management authorities to regional governments and producing governorates.

Draft Oil and Gas Law Grants Kurdistan Region Authority

According to the draft, the Kurdistan Region has several authorities, the most important of which is proposing an energy investment plan to the federal authorities.

Kurdistan has the right to license the development of new energy fields and must have representation in the federal council. It is also the region's duty to cooperate and coordinate with the federal authority in implementing the general plans of the energy sector.

https://channel8.com/english/news/58343?fbclid=IwY2xjawR9Q5JleHRuA2FlbQIxMABicmlkETF3YUZ5N04zb0FxeVZUR0VBc3J0YwZhcHBfaWQQMjIyMDM5MTc4ODIwMDg5MgABHvb8rbjpByIVZoTDZ3TBAoa0QdcEuPegHpxiYmjlruuWDJrxjzZ-A36EBd8u_aem_QBVBAedU8hid6YE8kK1uRA

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MarkZ: Speculation Around a Possible $2.81–$2.82 Range Amid Iraq’s Ongoing Economic Reforms 🇮🇶💵📊

 

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FRANK26….5-22-26….SHIFT

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