- Policies related to the Iran war, announced on May 29th, have led to consequences including spiking petrol prices and increased shipping costs, impacting the US market.
- Disruptions to oil supply and price spikes are occurring in the Middle East due to Iran's actions.
- Geopolitical tensions, U.S. sanctions, and structural changes within OPEC are impacting oil supply and market dynamics in the Middle East.
- US actions target Iranian financial evasion, which utilizes the UAE for front companies, while Iranian proxies operate in Iraq.
Iraq Accuses US and Iran of 'Strangling' Economy Over Oil Exports
What happened
Iraqi government spokesman Haider Al-Aboudi accused the United States and Iran of "strangling" Iraq's economy by failing to grant exemptions for Iraqi oil exports through the Strait of Hormuz. Al-Aboudi also criticized the government of former Prime Minister Mohammed Al-Sudani for causing losses of nearly 36 trillion Iraqi dinars due to a 2023 exchange rate reduction. The current government is debating a devaluation to 1,520 dinars per dollar, despite the parallel market rate remaining at 1,630 dinars.
From aawsat.com
Why it matters
The inability to export oil through the Strait of Hormuz is cited as a suffocating blockade on Iraq's economy. The discrepancy between the official exchange rate and the parallel market rate has contributed to substantial increases in the prices of many essential goods, including food items.
Geopolitical tensions, U.S. sanctions, and structural changes within OPEC are impacting oil supply and market dynamics in the Middle East.
From aawsat.com
Who's involved
- IraqSovereign state whose economy is currently under strain from geopolitical actions.
- Nouri al-MalikiCalled on citizens not to use the dollar exchange-rate adjustment as a pretext for stirring concern.
- Prime Minister of IraqThe government whose exchange rate decisions are currently generating significant debate.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Central Bank of IraqSpeculative
The currency devaluation and exchange rate crisis could directly impact the Central Bank of Iraq's mandate.
Keep exploring
The entities involved
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Iraq
sovereign state in Western Asia
- U.S. military forces are currently involved in a heightened state of tension with Iran, utilizing evacuation operations in both Kuwait and Iraq amidst ongoing Iranian drone threats.
- A corridor project aiming to strengthen trade links to Europe is advancing with the cooperation of Turkey between Iraq and Europe.
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Nouri al-Maliki
Prime Minister of Iraq from 2006 to 2014
Related events
- Iran's actions complicate Iraq's strategic balance, leading Iraq to seek cooperation with the US administration amid US pressure on Iran.
- Iran attacks impact the region while the Kurdistan Regional Government disputes revenues with the federal government.
- Trump administration seeks to isolate Iran financially while China remains a major buyer of Iranian oil, and UAE suspends trade.
- The ongoing war with Iran is reportedly causing significant damage to Iraq's crude oil output and straining the country's state finances.
- The Badr Organization, led by Hadi Al-Amiri, is involved in disputes regarding US disarmament pressure and Iraq's relationship with Iran and the US.