Iraq’s Oil Economy Threatened By Iran Conflict

  

As the war with Iran enters its third day Iraq continues to be impacted. There were continued strikes within its territory while the country’s oil industry is coming under threat which may undermine the state.

 

The U.S. and Israel continued limited attacks against the pro-Iran Resistance within Iraq. Kataib Hezbollah’s base in Babil’s Jurf al-Sakhr was hit for the third day leading to one death and one injured. The group announced that four of its men were killed on March 1 and 11 wounded in a strike in Anbar’s Akashat and 1 more in Samara in Muthanna province. A headquarters of the 16^th Hashd Brigade a Turkmen outfit was struck in the Tuz Kharmato district in Salahaddin. The Americans and Israelis appear to be hitting established bases like Jurf al-Sakhr along with other targets of opportunity.

 

Iran and the Resistance on the other hand went after America, Kurds and Iranian Kurdish opposition parties. Drones were sent against bases housing U.S. troops at Irbil and Baghdad airports. A drone was shot down over Balad Air Base in Salahaddin. The 11^th Peshmerga Brigade in Irbil was hit along with three camps run by the Kurdistan Freedom Party and the Kurdish National Army which are Iranian groups opposed to the regime. Attacks upon the U.S. have failed due to air defense systems but Tehran and its allies are more interested in the imagery that they are taking on Washington.

 

What is far more important for Baghdad is that the conflict has largely shut down the Strait of Hormuz. There is fear that tankers could be hit and insurance companies are refusing to ensure any ships that might attempt the voyage. The vast majority of Iraq’s petroleum exports travel through this route accounting for around 90% of the state’s revenues. Oil and natural gas production has largely closed down in Kurdistan. If the fighting continues companies southern Iraq could do the same threatening the entire Iraqi economy.

 

SOURCES

 

Agence France Presse, “New strikes hit Iraq base housing Iran-backed fighters: faction source,” 3/2/26

 

Bas News, “Gulf Keystone Halts Kurdistan Operations Amid Rising Ira-US-Israel War,” 3/2/26

 

Iraq Oil Report, “Iraqi oil shutdowns loom as U.S. attacks Iran,” 3/1/26

 

Kurdistan 24, “Drone Attack Targets Peshmerga Headquarters Near Erbil, Ministry Urges Baghdad to Act,” 3/2/26

 

Rudaw, “Kurdish party says attacked in Erbil,” 3/2/26

 

Shafaq News, “A drone and a fighter jet targeted a Popular Mobilization Forces headquarters south of Kirkuk,” 3/2/26

- “A drone that attempted to target Balad Air Base in Salah al-Din was shot down,” 3/2/26

- “The Popular Mobilization Forces announce the killing and wounding of members in an attack on Jurf al-Sakhr in Babylon,” 3/2/26

 

Xinhua, “4 drones shot down near U.S. base at Iraq’s Erbil airport,” 3/2/26