Iraq’s New Government Is a Temporary Truce, Not a Strategic Settlement

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  Baghdad’s latest cabinet formation reveals a state still trapped between militia power, oil dependency, Kurdish fragmentation, and the geopolitical collision between Washington and Tehran. By Dr. Pshtiwan Faraj | Sulaimani, Iraq | 13 May 2026 — Kurdish Policy Analysis After six months of political paralysis, Iraq finally has a government. Yet the formation of Prime Minister Ali al-Zaidi’s cabinet may say less about political stabilization than about the inability of Iraq’s competing factions to sustain prolonged deadlock. The parliamentary approval of Zaidi’s government this week ended one of the country’s longest post-election crises in recent years. But the structure of the new cabinet — incomplete, contested, and heavily shaped by factional bargaining — reveals an Iraqi state still fundamentally unable to resolve its core strategic contradictions. The most important fact about Iraq’s new government is not that it was formed. It is that it emerged without resolving the dis...
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Iraq’s Oil Exports Collapse 82% as Wartime Shock Breaks Shipping Routes and Triggers Fiscal Emergency Warning

 


Kurdish Policy Analysis / SULAIMANI, IRAQ--March output plunge exposes fragility of Iraq’s export system as Hormuz-linked disruption, pipeline improvisation, and emergency rerouting fail to offset seaborne shutdowns.

Iraq’s oil exports reportedly fell by 82% in March amid disruption to seaborne routes and emergency rerouting through pipelines and overland corridors, raising fears of a looming fiscal shortfall as revenues cover only a fraction of state obligations.

— Iraq’s oil export system experienced a severe contraction in March, with shipments collapsing by an estimated 82% as seaborne routes were disrupted and emergency alternatives struggled to compensate for lost capacity, according to data cited from the State Oil Marketing Organization (SOMO).

Ali Nizar al-Shatari, director general of State Oil Marketing Organization (SOMO), said Iraq exported roughly 18 million barrels during March, generating about $2 billion in revenue. The figures represent a sharp decline from February’s 99.8 million barrels and $6.8 billion in earnings.

The disruption affected exports from multiple production centers, including Basra, Kirkuk, and the Kurdistan Region, with average daily flows falling from more than 3.5 million barrels per day in February to roughly 580,000 barrels per day in March.

The collapse coincided with widespread instability across Iraq’s export infrastructure, particularly seaborne shipments routed through the Strait of Hormuz, a critical corridor for global energy flows.

Officials and industry sources describe March as a period of fragmented emergency logistics rather than normal export operations, with Iraq relying on a combination of limited southern Gulf loadings, revived northern pipeline flows through Ceyhan, and rapid overland trucking arrangements.

Southern exports from Basra were significantly reduced after early March, with operators reportedly facing security and insurance constraints affecting tanker movements in the Gulf.

The northern export route via Turkey’s Ceyhan terminal was partially restored mid-month following emergency coordination between Baghdad and the Kurdistan Region, allowing limited volumes of Kirkuk and Kurdish crude to reach international markets.

Additional overland and regional diversification measures, including trucking routes and emerging transit agreements through neighboring countries, helped stabilize minimal flows but were insufficient to offset the loss of seaborne capacity.

The revenue shock has created a widening fiscal gap for the Iraqi state, which relies on oil for roughly 90% of government income. Monthly earnings in March covered only a fraction of public wage obligations and operating expenditures, according to official budget data cited in the report.

Economists warn that Iraq’s reserves could sustain short-term stability, but prolonged export disruption could force deficit financing and increase pressure on state salaries and public spending commitments.

Ahmed Tabaqchali, an Iraq-focused economist cited in the report, said the country may have enough reserves to avoid immediate crisis, but could face borrowing needs if export levels do not recover within weeks.

The developments underscore the structural vulnerability of Iraq’s economy to disruptions in maritime energy corridors and highlight the limited capacity of emergency diversification routes to replace Gulf export infrastructure at scale.

#Iraq #Oil #SOMO #EnergyCrisis #StraitOfHormuz #Economy #OPEC #MiddleEast #FiscalCrisis #OilMarkets


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