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Iraq
Nation / PlaceIQ

Iraq

Arab republic; OPEC+ chronic over-quota producer; oil revenues near 90% state income; Ceyhan pipeline non-Hormuz backstop.

Iraq remains formally neutral in the Iran war, but US strikes on Ahvaz on 17 and 19 July, roughly 100km from its eastern border, mark the campaign's closest approach yet to Iraqi territory, sharpening the pressure on Baghdad's balancing act.

Last refreshed: 24 July 2026 · Appears in 3 active topics

Key Question

Is Iraq's chronic OPEC+ non-compliance undermining Saudi Arabia's market management?

Timeline for Iraq

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Background

Iraq hosts roughly 2,500 US troops at bases including Al-Asad and Erbil while Kataib Hezbollah and the wider Popular Mobilisation Forces, some 100,000 fighters integrated into State Security since the 2014 campaign against ISIS, operate largely unchecked. Prime Minister Mohammed Shia al-Sudani governs 43 million people from a position Baghdad cannot resolve: it can expel neither the PMF nor the US troops without risking, respectively, civil war or a security vacuum.

Oil underwrites the state: Iraq pumped around 4.5 million barrels a day before the Hormuz closure, some 90% of government revenue, yet remains chronically non-compliant with its OPEC+ quota even as the group added barrels it cannot pump. Its Kirkuk-Ceyhan pipeline is one of the few non-Hormuz export routes for Gulf crude, and Basra Medium competes directly with Russian Urals for European refining capacity.

Iraq's own balancing act was tested by geography rather than choice on 8 July: Najaf's shrine city, sitting inside its borders, meant hosting Ali Khamenei's funeral cortege fell to President Nizar Amidi, a role no Iraqi head of state had performed before.

Key Issues
War's inland push

Strikes now reach its eastern border

On 17 July, US aircraft, drones and warships struck Ahvaz and Yazd overnight, the campaign's deepest push inland yet; Yazd lies some 540km from the coast. Two nights later, on 19 July, a second wave hit Ahvaz again, this time alongside a water pumping station. Ahvaz sits roughly 100km from Iraq's border, closer than the campaign has come before.

No Iraqi territory or personnel have been struck, and Baghdad stays officially neutral. But hosting some 2,500 US troops while Iran-aligned Kataib Hezbollah operates freely on its soil leaves Iraq with no comfortable distance Left to claim; a war that once stayed offshore is now next door, testing how long its balancing act between Washington and Tehran can hold.

Common Questions

Strikes now reach its eastern border

How has the Iran-US conflict affected Iraq's oil exports?
Iraq declared Force majeure on all foreign-operated oilfields in March 2026 after the Strait of Hormuz was blocked, halting exports and filling storage to capacity.Source: Iraqi oil ministry letter, 17 March 2026

Reference

Who is the Prime Minister of Iraq?
Mohammed Shia al-Sudani has been Prime Minister of Iraq since October 2022, governing a Coalition government that must balance US military presence and Iranian-backed militia influence.Source: Iran Conflict 2026 briefing
What is Basra crude and who buys it in Europe?
Basra Medium is a medium-sour Iraqi export crude that competes with Urals in the European refining slate. European refineries previously configured for Russian crude hold residual preference for Basra-type barrels.Source: EIA, market data
What is the Popular Mobilisation Forces' role in Iraq?
The PMF are Iranian-backed militias formally integrated into Iraq's security forces after the 2014 ISIS campaign, numbering an estimated 100,000 fighters with close ties to Tehran. They operate freely on Iraqi soil, creating a sovereignty paradox for Baghdad: expelling them risks civil war, tolerating them risks US retaliation.Source: entity background
What US military bases are in Iraq?
The main US bases are Al-Asad Airbase in Anbar province and Erbil in the Kurdish region. About 2,500 US troops remain under an ongoing security arrangement.
What are the Popular Mobilisation Forces in Iraq?
The PMF (also known as Hashd al-Shaabi) are Iranian-backed militias formally integrated into Iraq's security forces after the 2014 ISIS campaign. They number an estimated 100,000 fighters and maintain close ties to Tehran, operating from Iraqi territory throughout the 2026 conflict.
How is Iraq exporting oil with the Strait of Hormuz closed?
Iraq negotiated bilateral transit for a Very Large Crude Carrier of approximately 2 million barrels through direct engagement with Tehran in May 2026, bypassing Persian Gulf Strait Authority yuan tolls in favour of political accommodation. Additional VLCC transits were under negotiation. Iraq had previously declared Force majeure on all foreign-operated oilfields when Hormuz closed in March 2026.Source: entity background
Did Iraqi militias shoot down a US aircraft in 2026?
Iraqi militias claimed responsibility for the KC-135 crash near Turaibil in March 2026 that killed six US personnel. CENTCOM said the crash was not caused by hostile fire; the Baghdad government condemned the claim.Source: CENTCOM
Why did Iran's foreign minister announce the Hormuz claim from Baghdad in June 2026?
On 28 June 2026, Foreign Minister Araghchi declared Iran's 'sole oversight' of the Strait of Hormuz from Baghdad, using Iraq's capital as the platform for a maximalist statement. The choice of Baghdad underscores Iraq's position as a venue it cannot control: the country hosts 2,500 US troops while Iranian-backed militias and Tehran's officials operate freely on the same soil.Source: Lowdown Iran Conflict 2026 Update 141
How is Iraq affected by the Iran-US conflict?
Iraq hosts US troops and Iranian-backed PMF militias simultaneously. It declared Force majeure on foreign-operated oilfields after Hormuz closure, then negotiated bilateral VLCC passage directly with Iran in May 2026 to partially restore oil revenues.Source: Iran Conflict 2026 briefing
Why does Iraq keep exceeding its OPEC production quota?
Iraq's federal budget is almost entirely dependent on oil revenues; it consistently produces above its OPEC+ quota to fund public spending. In mid-2026 Iraq remains chronically non-compliant even as group-wide output has collapsed 9.58 mbd below quota on Hormuz constraints.Source: European Oil Markets briefing
Did Iraq qualify for the 2026 FIFA World Cup despite the Iran conflict?
Iraq qualified for the 2026 FIFA World Cup, but airspace closures disrupted travel preparations. FIFA intervened with emergency Visa assistance to enable transit through alternative corridors for the Iraqi Football Association.Source: entity background