Trump and Xi Jingping summit: How are the United States and China redefining their relationship?

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As tensions over trade, Taiwan, technology, and global influence intensify, the meeting between Donald Trump and Xi Jinping may determine the future balance of power between Washington and Beijing. By Dr. Pshtiwan Faraj | Sulaimani, Iraq | 13 May 2026 — Kurdish Policy Analysis "We don't have permanent allies and we don't have permanent enemies, only our interests are permanent, and we have to follow them." – Henry John Temple. The root of the current Strait of Hormuz tensions is not only about shipping routes or oil prices, but also about the final collapse of the historical US concept towards Beijing. However, the 2025 National Security Strategy, released by the White House in November, says this was a historic mistake because China used the assets it accumulated to strengthen itself and compete with the West, not to become their partner. For many years, the United States alone maintained maritime security; The fifth US ship in Manama, Bahrain, worked only to keep o...
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Iraq's Salary Crisis Deepens as Oil Shock Threatens Baghdad's Finances


 A collapse in oil exports is pushing Iraq toward a dangerous fiscal crossroads, raising fears over public salaries, currency stability, and the country's broader economic future.

Dr. Pshtiwan Faraj, Sulaimani, Iraq, April 2026  —Baghdad is confronting one of its most serious financial challenges in years. The closure of the Strait of Hormuz and escalating regional tensions have sharply disrupted Iraqi oil exports, the backbone of the country's economy. With revenues plunging, the Iraqi government is now scrambling to secure enough liquidity to pay millions of state employees.

For a country where oil accounts for roughly 90 percent of government revenues, the stakes could hardly be higher.

Oil Exports Collapse

Iraq reportedly exported around 100 million barrels of oil per month under normal conditions. Last month, however, exports reportedly fell to just 18 million barrels—a staggering decline that has sent shockwaves through financial markets and government institutions alike.

Such a dramatic contraction would leave Baghdad facing a massive budget shortfall almost overnight. With salary obligations consuming a large share of monthly expenditures, even a short disruption could trigger severe political and social consequences.

The Iraqi state is, in many ways, a salary machine. When that machine stalls, instability follows.

Three Emergency Options

According to emerging discussions within Iraq's financial circles, the Ministry of Finance may be forced to choose between three highly risky options.

1. Domestic Bond Sales

Baghdad could issue bonds to local banks, effectively borrowing from Iraq's own financial system. While this would provide immediate liquidity, it would also place pressure on banking sector reserves and potentially limit private-sector lending.

2. Printing More Dinars

This is the fastest option—and arguably the most dangerous. Expanding the money supply without corresponding economic output could fuel inflation, weaken the Iraqi dinar, and erode household purchasing power.

History offers a blunt lesson: governments rarely print their way out of crises.

3. Foreign Borrowing

International loans would buy time, but at a cost. Iraq could find itself increasingly dependent on foreign creditors, potentially pledging future oil revenues in exchange for emergency financing.

That would mortgage tomorrow to survive today.

Why Kurdistan Should Be Watching Closely

The Kurdistan Region remains heavily dependent on federal budget transfers, particularly for public-sector salaries. Any delay or disruption in Baghdad's ability to pay would almost certainly reverberate across Erbil, Sulaymaniyah, and Duhok.

For Kurdish citizens already frustrated by repeated salary delays, another federal fiscal crisis could deepen public anger and intensify political tensions.

The economic relationship between Baghdad and Erbil has always been fragile. A sustained oil shock could make it even more volatile.

Political Risks Ahead

Salary delays in Iraq are never merely economic events—they are political detonators.

Public-sector workers form the backbone of Iraq's middle class and a critical pillar of political stability. Any prolonged inability to meet payroll could spark demonstrations, weaken Prime Minister Mohammed Shia al-Sudani's government, and embolden rival political factions.

In Iraq, unpaid salaries quickly become a national security issue.

The Bigger Strategic Picture

The crisis exposes Iraq's enduring vulnerability: an economy overwhelmingly reliant on oil and dangerously exposed to regional geopolitical shocks.

As long as Iraq remains dependent on a single export route and a single commodity, every regional escalation will threaten domestic stability.

The Strait of Hormuz is not merely a waterway for Iraq—it is an economic lifeline.

Outlook

If regional tensions persist, Baghdad may soon be forced into painful choices that carry long-term consequences for the dinar, inflation, and Iraq's fiscal sovereignty.

For ordinary Iraqis, the question is brutally simple: will salaries arrive on time?

For policymakers, the larger question is even more urgent: how many more shocks can Iraq's oil-dependent economy absorb before the system itself begins to crack?

#Iraq #Kurdistan #Oil #Baghdad #Economy #MiddleEast #StraitOfHormuz #Geopolitics #KRG #Energy

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