The Iraqi oil trap and its paradox: A rentier economy amidst geopolitical shocks

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In an economy dependent on oil exports, and with the disruption of crude oil tanker traffic through the Strait of Hormuz due to the US-Iranian war, the core of the problem lies not only in the volume of exports and the revenues generated from them, but also in how these revenues are managed, and in the amount of spending that depletes them. On September 22, 2026, Iraqi Prime Minister Ali Zaidi told The New York Times that Iraq had lost nearly $60 billion in oil revenue due to the war with Iran. For approximately two months, Iraq was unable to export 90% of its oil, while 90% of its economy depended on crude oil exports. Before June 2025, when the first round of the US-Israeli conflict with Iran erupted, the Central Bank of Iraq’s reserves had exceeded $110 billion, but by October 2026 they had fallen to less than $60 billion. Although Zaidi’s government managed to balance global polarization and geopolitical tensions during its first five months in office, the biggest problem was the i...

PUK and KDP renew calls for unity amid prolonged political deadlock in the Kurdistan Region


 
By Dr. Pshtiwan Faraj | Kurdish Policy Analysis 

Senior officials from the Kurdistan Region's two dominant parties emphasise coordination and dialogue as pressure grows to form a new regional government

Senior PUK and KDP officials have reaffirmed their commitment to dialogue and political coordination, underscoring calls for unity as government formation in the Kurdistan Region remains stalled.

Senior officials from the Patriotic Union of Kurdistan (PUK) and the Kurdistan Democratic Party (KDP) have renewed calls for greater political coordination and unity following a high-level meeting in Erbil, signalling continued efforts to preserve dialogue as the Kurdistan Region faces mounting political and economic challenges.

The meeting brought together a senior delegation from the PUK's Centre in Erbil, led by Rebaz Berkoti, a member of the party's Leadership Council and head of Centre 3 in Erbil. The delegation was received by Dr. Pshtiwan Sadiq, head of the KDP's Organisational Bureau in Erbil, alongside members of the bureau.

According to both parties, discussions focused on the Kurdistan Region's current political situation and the importance of cooperation between the two largest Kurdish political movements.

Emphasis on Dialogue and Coordination

During the meeting, representatives from both parties stressed that continued coordination and joint political action remain essential to addressing the challenges facing the Kurdistan Region.

Berkoti described the visit as an effort to strengthen unity and reinforce the long-standing relationship between the PUK and KDP.

He also highlighted the role of the media in supporting dialogue and fostering an environment conducive to political cooperation.

For his part, Dr. Sadiq said relations between the two parties remain transparent and constructive, adding that dialogue would continue despite political differences.

The meeting did not announce any formal agreements or policy decisions, but both sides reiterated their commitment to maintaining communication.

A Symbolic Meeting During a Critical Political Period

The meeting comes at a particularly significant moment for Kurdish politics.

Nearly 20 months after the Kurdistan Region's parliamentary elections, political parties have yet to agree on the formation of a new Kurdistan Regional Government, prolonging institutional uncertainty and delaying legislative activity.

Senior Kurdish leaders, including Prime Minister Masrour Barzani, have recently urged political parties to accelerate government formation, reactivate parliament, and prioritise public interests over partisan disputes.

Against that backdrop, meetings between senior PUK and KDP officials carry added political significance, even when they produce no immediate breakthroughs.

Analysis: Political Messaging Without Immediate Breakthrough

Although the meeting produced no concrete agreements, it reflects a broader effort by both Kurdish parties to project stability during a period of political uncertainty.

The KDP and PUK remain the Kurdistan Region's two dominant political forces, and meaningful progress on government formation depends largely on continued dialogue between them. Publicly emphasising cooperation helps reassure domestic audiences and international partners that communication channels remain open despite prolonged negotiations.

At the same time, the absence of specific announcements illustrates the gap between positive political messaging and tangible institutional progress. While both parties continue to speak of unity, the Kurdistan Region remains without a fully formed government nearly two years after elections—a delay that has complicated policymaking, economic planning, and the implementation of reforms.

The meeting also comes as the Kurdistan Region confronts multiple external pressures, including fiscal disputes with Baghdad, regional security concerns, and economic uncertainty. In this environment, greater coordination between the KDP and PUK is not merely a matter of political symbolism but an increasingly important prerequisite for effective governance.

Whether such meetings ultimately translate into an agreement on cabinet formation remains to be seen. However, they suggest that neither party wishes to be perceived as responsible for further political paralysis, particularly as public expectations for a functioning government continue to grow.

#Kurdistan #PUK #KDP #KurdishPolitics #Iraq


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