Geopolitical Briefing: Iraq
— 1 June 2025
- Baghdad initiates legal proceedings against the Kurdistan Regional Government over unauthorized energy contracts with U.S. firms.
- Iraq hosts the 2025 Arab League Summit, proposing initiatives to enhance Arab cooperation in security, economy, and environmental challenges.
- Iran-backed militias exploit international financial systems to circumvent sanctions, prompting regulatory crackdowns.
- Iraq's oil exports surpass 400 million barrels in the first third of 2025, reflecting strategic economic positioning.
- Over 19,000 prisoners released under a new amnesty law aimed at alleviating prison overcrowding and addressing judicial concerns.(The Times of India, Wikipedia, WSJ, شفق نيوز, AP News)
On 27 May 2025, the Iraqi federal government filed a lawsuit against the semi-autonomous Kurdistan Regional Government (KRG) concerning a $110 billion energy agreement with U.S. companies. Baghdad contends that these deals violate the Iraqi constitution, which mandates federal oversight of the country's natural resources. This legal action underscores ongoing tensions between the central government and the KRG regarding control over oil and gas resources, reflecting Baghdad's efforts to assert authority over energy contracts and ensure national governance over vital economic sectors. (The Times of India)
On 17 May 2025, Iraq hosted the 34th Ordinary Session of the Arab League Summit in Baghdad, with participation from 20 out of 22 member states. The summit focused on the ongoing war in Palestine, with Iraq pledging $20 million towards the reconstruction fund for Gaza and another $20 million for Lebanon. Iraq also proposed several initiatives to bolster Arab coordination on national security, including the establishment of the Joint Arab Security Coordination Chamber and joint coordination centers to combat terrorism, narcotics, and transnational crime, all headquartered in Baghdad. Additionally, Iraq suggested forming an intra-Arab business council and launching the Arab Economic Reform Covenant initiative to enhance economic integration. (Wikipedia)
Iran-backed militias in Iraq have been exploiting cross-border transaction loopholes in Mastercard and Visa networks to circumvent U.S. sanctions and acquire hard currency. Following a 2022 U.S. Treasury crackdown on fraudulent Iraqi wire transfers, these groups shifted to exploiting cash and debit cards, capitalizing on the currency exchange rate disparity between Iraq’s official and unofficial dollar markets. Monthly card transactions surged from $50 million to $1.5 billion by April 2023. In response, the Central Bank of Iraq introduced a $300 million cap on monthly cross-border payments and other controls, while Visa and Mastercard blocked thousands of cards and vendors associated with illicit activities. (WSJ)
Iraq's State Oil Marketing Organization reported on 29 May 2025 that the country exported over 400 million barrels of crude oil during the first four months of 2025. This substantial export volume underscores Iraq's strategic efforts to maintain its position in the global oil market and reflects the country's ongoing commitment to leveraging its natural resources for economic stability and growth. (شفق نيوز)
As of April 2025, Iraq has released more than 19,000 prisoners under a newly enacted amnesty law aimed at alleviating severe prison overcrowding and addressing grievances over judicial practices, particularly regarding terrorism-related convictions. The law, passed in January, allows some individuals previously convicted of terrorism, including Islamic State group membership, to seek retrials if their confessions were obtained under duress. However, those convicted of killings related to terrorism are excluded from the amnesty. The law also covers crimes such as corruption, theft, and drug use. This initiative reflects Iraq's efforts to reform its judicial system and address human rights concerns. (AP News)
