Iraq is developing plans to develop its trade policy locally and globally.
post by economics professor Suham Youssef:
A Stressful Start: Iraq Enters 2025 with Worrying Financial Indicators and Accumulating Challenges.
The first quarter of 2025 appears to be laden with worrying indicators, reflecting ongoing economic challenges and a decline in some key public finance indicators, amid a tense regional environment and complex domestic circumstances:
The Central Bank's foreign reserves gradually declined to $96.9 billion in May, compared to $111 billion in 2023, indicating continued pressure on resources, although reserve levels remain within safe limits so far.
Public revenues declined by 12.7%, with a significant drop in non-oil revenues (30%), and a clear decline in income taxes, which were cut in half.
In contrast, total expenditures rose by 12.2%, driven by a 22% increase in operating expenses and a 14% rise in the wage bill, which widened the current account deficit.
Amid regional tensions, Iraq is losing at least $250,000 a day due to the closure of its airspace. This is an indirect but tangible impact, given the need for every dollar to boost cash flow.
The message is clear:
the beginning of 2025 points to escalating fiscal challenges that require an urgent review of spending priorities and the activation of revenue diversification paths, especially in light of regional uncertainty and oil price volatility.
The Iranian Revolutionary Guard Corps' (IRGC) channel on its X platform published a brief statement moments after US President Donald Trump announced the bombing of three nuclear sites in Iran. The IRGC said, "Now the war has begun for us," referring to America's official intervention alongside Israel in the war against Iran.
An economic vision for "floating" Iraqi oil at sea in anticipation of the closure of the Strait of Hormuz.
Economist Nabil Al-Marsoumi suggested on Saturday "floating" Iraqi oil at sea in anticipation of the closure of the Strait of Hormuz.
Al-Marsoumi stated in a tweet seen by Shafaq News Agency, "Iraq should be prepared for the possibility of its oil export outlets being closed by sea as a result of the closure of the Strait of Hormuz, even if this possibility is weak."
He suggested that Iraq "do as Saudi Arabia does, which maintains a floating oil reserve of 155 million barrels, and as Iran does, which currently maintains a floating reserve in tankers near Singapore and Malaysia of 120 million barrels, equivalent to two months of Iranian exports."
This comes as Iraqi Oil Minister Hayan Abdul-Ghani confirmed on Saturday that oil exports are stable so far, but that the Ministry of Oil is working on alternative export options if the Strait of Hormuz is closed.
Iraqi Foreign Minister Fuad Hussein warned on Friday that global markets could lose 5 million barrels of oil per day due to the Iranian closure of the Strait of Hormuz due to Israeli bombing.
Meanwhile, economic expert Hilal Al-Taan confirmed to Shafaq News Agency last Tuesday that closing the Strait of Hormuz would paralyze the entire Gulf region and limit oil exports to the global market.
The Islamic Republic of Iran News Agency quoted Esmail Kowsari, a member of the parliament's security committee, as saying that Iran is seriously considering closing the strategic Strait of Hormuz.
Brigadier General Esmail Kowsari of the Iranian Armed Forces also announced that "closing the Strait of Hormuz is under consideration, and we will make the appropriate decision with all firmness."
The New York Times, citing US officials, reported on Thursday that "Iran maintains naval assets and other capabilities to close the Strait of Hormuz."
The exchange of missile fire between Israel and Iran has raised concerns that Tehran may attempt to close the Strait of Hormuz, through which approximately one-fifth of the world's crude oil passes—approximately 18 to 19 million barrels per day of oil, condensates, and fuel, and approximately 11 billion cubic feet per day of liquefied natural gas.
The Strait of Hormuz is a narrow shipping lane in the Gulf region, constituting the outlet for its oil to the outside world. It is known as the lifeline of the industrialized world, and two-thirds of the world's oil production passes through it.
Regarding how Iran might close the Strait of Hormuz, a 2012 report by the US Congressional Research Service indicated that Iran may adopt a gradual approach to closing the strait, including declaring a no-navigation zone in the Strait of Hormuz without clearly specifying the consequences of violating it, and announcing that passing vessels will be subject to inspection or confiscation.
In addition, warning shots were fired at ships, specific vessels were targeted, naval mines were planted in the strait and the Gulf, and submarines and missiles were used to target commercial and military vessels.
Red Sea alert: Houthis to target US ships if Washington backs Israel
On Saturday, Yemen's Ansarallah (Houthis) threatened to target the US interests in the Red Sea if Washington supports Israeli military operations against Iran.
“If the US involves in an attack and aggression against Iran with the Israeli enemy, the armed forces will target its ships and warships in the Red Sea,” the group wrote on X.
The Houthis described Israel as “the aggressor against Iran,” referencing previous operations in Gaza and current attacks on Lebanon, Syria, and Yemen. It further accused Tel Aviv of seeking regional dominance, allegedly underwritten both openly and strategically by the United States.
The movement explained that the objective of this project is to “confiscate the freedom, independence, and dignity of our nation,” while also aiming to erode the region’s identity, occupy land, exploit resources, and normalize violations of sacred sites and human life.
The statement comes amid reports indicating that the United States is preparing to support Israel militarily in its confrontation with Iran.
Tensions have sharply escalated following Israel’s launch of Operation Rising Lion, a campaign of targeted strikes on Iranian military and nuclear sites. The operation has killed several senior commanders from Iran’s Islamic Revolutionary Guard Corps and several key nuclear scientists.
Iran responded with True Promise 3, its most extensive direct attack on Israeli territory to date. The retaliatory operation has so far included 18 waves of missile and drone strikes.
US forces enter a state of maximum alert inside Iraq after the Iranian nuclear attack.
An informed security source reported on Sunday (June 22, 2025) that US forces stationed in a number of military bases inside Iraqi territory have entered a state of maximum alert, in light of the rapid escalation between the United States and Iran, and the continued military tension in the region.
The source explained in press statements, followed by "Baghdad Today", that "the American leadership informed the military units at the Ain al-Assad and Harir bases and some other locations to take exceptional measures and raise the level of combat readiness to the highest level," indicating that "these moves come in anticipation of any possible response by armed factions inside Iraq or from the Iranian side, following the recent statements of US President Donald Trump."
Earlier, Trump announced strikes on Iranian nuclear sites, and tensions between Tehran and Tel Aviv escalated amid fears that the situation could slide into a wider conflict that could spill over into Iraq.
US lawmakers applaud Trump for bombing Iranian nuclear facilities
Republican U.S. Senator Marsha Blackburn said regarding the U.S. attack on three nuclear sites in Iran: "Donald Trump knows that peace can only be achieved through strength; this is a victory for the United States."
"I regret that Iran has brought the world to this point, and I thank Trump for his decisive action," US Representative Rick Crawford wrote on Twitter.
John Fetterman, another Republican senator, declared, "What Trump did was the right thing to do. Iran is the world's largest state sponsor of terrorism and must not attain nuclear capability."
From Tel Aviv to Erbil: Tehran's Map of Targets Should Washington Enter the War
he ongoing war between the Zionist entity and the Islamic Republic of Iran is taking a dangerous turn, amid escalating warnings of an escalation into an open regional conflict should the United States decide to intervene directly militarily.
As the exchange of attacks and rising tensions continue, many parties in the region assert that any direct American involvement in the war will not pass without a broad and violent response from Tehran, potentially igniting the entire region.
Al-Fatah Alliance MP Mukhtar al-Moussawi told Al-Maalouma News Agency that if the United States directly intervenes in the ongoing war, Iran's response will be unprecedented and will not be limited to targeting the Zionist entity alone, but will extend to all of Washington's allies in the Middle East, in addition to its military bases and interests spread across more than one country.
Al-Moussawi explained that Tehran will not stand idly by in the face of any direct American aggression, stressing that the Iranian leadership has prepared a target bank that includes territories in the Kurdistan Region of Iraq, Jordan, and several Gulf states, in addition to American bases in Iraq, Syria, and the region as a whole. This indicates that any future confrontation will be comprehensive and cannot be quickly contained.
Observers view the situation from a dangerous perspective, arguing that the region is on the brink of a major explosion. Direct US entry into the conflict will upend the equation, transforming the confrontation from a limited conflict into an open regional war, especially given Iran's powerful deterrent capabilities, including precision missiles, drones, and armed factions deployed across several countries, all of which form a network ready to be activated immediately upon the outbreak of a major confrontation.
Analysts expect the repercussions of the war, should it expand, to include the collapse of major political and economic projects in the region, with the potential for oil prices to surge to record levels due to the potential threat to navigation in the Arabian Gulf and the Strait of Hormuz, in addition to the disruption of vital global supplies, potentially causing a global energy crisis.
In the same vein, strategic experts have warned that Washington, despite its indirect support for Tel Aviv, is aware of the magnitude of the losses it could incur if it decides to intervene directly, both in terms of the lives of its soldiers and its economic and military interests. This explains its reluctance thus far to fully engage in the war.
The US administration is expected to take into account public opinion within the United States and fears of a recurrence of scenarios of sliding into costly, long-term wars in the Middle East, as occurred in Iraq and Afghanistan.
In light of this complex landscape, all scenarios remain wide open, while signs of escalation increase and the prospects for a political solution diminish. If the war expands, it will not remain confined to the entity and Iran, but will drag most countries in the region into its wake, heralding an unprecedented political and security earthquake.
If the escalation is not contained through diplomatic channels, the Middle East will enter a new phase of chaos and instability that will be difficult to emerge from without significant losses at all levels.
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Oil expert: Closing the Strait of Hormuz is currently unlikely... and why?
Al-Jawahiri told Al-Furat News Agency, "Closing the strait is not in the interest of Iran and the Gulf states if America does not intervene directly."
He added, "All countries will be harmed by closing the strait, and the damage will be great for Iraq in particular, given its heavy dependence on oil revenues.
" Al-Jawahiri pointed out that "even if the strait is closed, it will only last for a few hours or days, as it is considered a vital artery that transports 30% of crude oil heading to global markets."
Early Warning"... Closing the US Embassy in Baghdad Will Be Followed by an Unprecedented Event
Member of the Parliamentary Security and Defense Committee, Mohammed Al-Shammari, warned on Friday of the "danger" of closing the US embassy in Baghdad, considering it an "early warning" of an unprecedented security event that Iraq and the region may witness.
Al-Shammari told Shafaq News Agency, "The closure of the US embassy is a dangerous sign and a warning that the United States and Israel may carry out a dangerous act that requires the evacuation of the embassy staff." He stressed that "these indicators require political and security preparation within Iraq."
He added, "The Parliamentary Security and Defense Committee is a regulatory and legislative body, and it is its duty to investigate the mechanisms behind Iraq's weak defense, which is largely due to the lack of financial sovereignty."
He explained that "Iraq does not possess full sovereign power, because oil revenues go to the US Federal Reserve, which controls the transfer of funds to Baghdad." He noted that "if Iraq concludes any arms contract with a country that Washington does not approve of, the US Federal Reserve will refrain from making the transfer."
Al-Shammari pointed out that "if the money were in Iraq's hands, its armaments, salaries, and retirement would be national," adding that "sovereignty is not just air and land sovereignty, but begins with financial sovereignty."
Regarding the departure of US forces, Al-Shammari confirmed the existence of a binding agreement stipulating their complete withdrawal from the country by 2026, noting that "the withdrawal will be in accordance with a timetable agreed upon by both parties."
Earlier on Friday, the US Embassy in Iraq issued a statement to Shafaq News Agency, stating that "there has been no change to the operational status of the Embassy in Baghdad and the Consulate General in Erbil."
She added, "The United States is firmly committed to advancing its policy priorities in Iraq, strengthening its sovereignty, and engaging with Iraqi leaders and the Iraqi people."
Last week, the US Embassy in Baghdad issued a security alert warning American citizens of the increased possibility of violence or attacks against its interests in Iraq .
In a statement seen by Shafaq News Agency, the embassy called on all American citizens in Iraq to avoid places frequented by foreigners, in addition to avoiding large gatherings and crowds .
The embassy affirmed that it will continue to closely monitor the security situation and provide necessary updates as they become available. The US State Department maintains its travel warning for Iraq at Level 4 (No Travel ).
Last Sunday, Kata'ib Hezbollah in Iraq threatened to target US interests and bases across the region if Washington intervenes militarily in the ongoing war between Iran and Israel. The group also sent a message to the Iraqi government and the Coordination Framework.
Three reasons identified...the Parliamentary Finance Committee rules out sending budget tables to Parliament
Hussein Mounes, a member of the Iraqi Parliament's Finance Committee, ruled out on Saturday the government's submission of the federal budget schedules, while reviewing the main reasons for this move.
"There are several reasons for the government's exclusion from sending the federal budget schedules to parliament, most notably the financial deficit, unstable financial revenues, the lack of a real economic vision, and the approaching date of the legislative elections," Mounes told Shafaq News Agency.
He added, "The large deficit in the budget law amounts to 80 trillion dinars, which puts the government in a difficult position due to the lack of a real economic vision for completing the budget tables and submitting them to Parliament."
Parliamentary Finance Committee member Moeen Al-Kadhimi previously indicated that the budget schedules would likely reach parliament in early July.
Al-Kadhimi told Shafaq News Agency at the time that the Ministry of Finance had completed its observations on the budget law's schedules and submitted them to the Council of Ministers to express the government's opinion on the nature of the budget and the total amount compared to last year, in light of the decline in revenues achieved during the current year .
Al-Kadhimi explained that the Ministry of Finance is preparing the final schedules for the budget law after receiving the government's response to the submitted comments. He noted that the draft 2025 budget law is expected to be referred to the House of Representatives early next month after its approval by the Council of Ministers .
The delay in approving the 2025 federal budget in Iraq threatens financial stability, service and development projects, the disbursement of salaries and benefits, and other repercussions that directly impact the daily lives of Iraqi families, according to observers .
Observers believe the budget has become a "political tool" during election seasons, used as a means of pressure and bargaining between blocs, without regard for the impact of these procrastinations, which have continued for more than half a year .
Legal experts also believe that delaying the disbursement of financial allocations stipulated in the budget law constitutes a form of administrative corruption and opens the way for lawsuits to be filed against entities obstructing the implementation of the law .
Following threats from Iraqi factions, the Pentagon told Shafaq News: We are strengthening our capabilities while maintaining a "defensive posture."
The US Department of Defense confirmed, in an official response to Shafaq News Agency inquiries, that it has sent additional military capabilities to the Middle East. This comes at a time of escalating tensions over the ongoing conflict between Israel and Iran, and amid public threats from Iraqi armed groups loyal to Tehran to target US interests if Washington intervenes on Tel Aviv's behalf.
A Pentagon spokesperson told Shafaq News Agency that the official position issued by US Secretary of Defense Pete Hegseth is to enhance the capabilities of the US Central Command (USCENTCOM), without revealing the nature of those capabilities or their locations.
In a separate post, Department of Defense spokesman Sean Parnell explained that "US forces remain in a defensive posture," indicating that Washington is not seeking direct military escalation at this time.
The ministry declined to disclose whether it had engaged directly with the Iraqi government to contain threats posed by armed factions, or the nature of the expected response if US facilities or forces were attacked inside Iraq, referring only to the public statements of senior Pentagon officials.
Prominent Iraqi factions, such as Kata'ib Hezbollah and Harakat al-Nujaba, have escalated their warning tone, declaring their readiness to target US sites in Iraq and Syria if the United States intervenes militarily against Iran in the ongoing escalation.
The approximately 2,500 US troops deployed in Iraq are deployed as part of a training and support mission for Iraqi forces and the international coalition against ISIS. However, these forces have been the frequent target of missile and drone attacks since 2020, with attacks escalating following the assassination of Iranian General Qassem Soleimani and the deputy head of the Popular Mobilization Forces, Abu Mahdi al-Muhandis.
The latest US position comes at a time when the region is witnessing an unprecedented escalation on the ground, with Israel and Iran exchanging military strikes amid fears that the conflict could expand to new arenas, most notably Iraq, Syria, and Lebanon.
US Chargé d'Affaires: We will convey the Iraqi government's concerns to the relevant authorities in Washington.
Undersecretary of the Ministry of Foreign Affairs for Bilateral Relations, Mohammed Hussein Bahr al-Uloom, affirmed today, Saturday, to the Chargé d'Affaires of the United States Embassy in Baghdad, Ambassador Stephen Fagin, Iraq's absolute rejection of the use of military force. Fagin, in turn, confirmed that he would convey the Iraqi government's concerns to the relevant authorities in Washington.
A statement by the Ministry of Foreign Affairs received by the Iraqi News Agency (INA) stated that "Undersecretary of the Ministry of Foreign Affairs for Bilateral Relations, Mohammed Hussein Bahr al-Uloom, received the Chargé d'Affaires of the United States Embassy in Baghdad, Ambassador Stephen Fagin."
The statement added that "the two sides discussed developments in the region during the meeting, where Bahr al-Uloom reiterated the government of the Republic of Iraq's condemnation of the aggression against the Islamic Republic of Iran," stressing "Iraq's absolute rejection of the use of military force, as it poses a threat to the security and stability of the region," calling for "the adoption of diplomatic means to resolve disputes."
According to the statement, Bahr al-Uloum expressed "Iraq's deep concern over the repeated violations of Iraqi airspace by Israeli aircraft, a clear breach of Iraqi sovereignty through the overflight of the holy cities of Najaf and Karbala, and their extension southward." He pointed out that "this violation is not only an infringement of sovereignty, but also poses a direct threat to the security and safety of civil aviation, especially via Basra International Airport, which is currently the only air outlet for the return of Iraqi citizens stranded abroad and the departure of travelers to their destinations."
According to the statement, Bahr al-Uloum called on "the United States of America to exert the necessary efforts to stop these violations and enhance Iraq's ability to deter all threats targeting its sovereignty, security, and the safety of its territory and airspace, based on the Strategic Framework Agreement signed between the two countries in 2008."
For his part, Ambassador Fagin stressed that the United States is making intensive efforts to calm the situation and avoid further escalation, noting that he will convey the Iraqi government's concerns to the relevant authorities in Washington.
US forces enter a state of maximum alert inside Iraq after the Iranian nuclear attack.
An informed security source reported on Sunday (June 22, 2025) that US forces stationed in a number of military bases inside Iraqi territory have entered a state of maximum alert, in light of the rapid escalation between the United States and Iran, and the continued military tension in the region.
The source explained in press statements, followed by "Baghdad Today", that "the American leadership informed the military units at the Ain al-Assad and Harir bases and some other locations to take exceptional measures and raise the level of combat readiness to the highest level," indicating that "these moves come in anticipation of any possible response by armed factions inside Iraq or from the Iranian side, following the recent statements of US President Donald Trump."
Earlier, Trump announced strikes on Iranian nuclear sites, and tensions between Tehran and Tel Aviv escalated amid fears that the situation could slide into a wider conflict that could spill over into Iraq.
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