Iraq Economic News and Points To Ponder Thursday Afternoon 5-21-26

Oil Prices Rally Following US Strategic Reserves Drop

2026-05-21   Shafaq News   Oil prices edged up on Thursday, paring some previous losses as investors monitored peace talks between the U.S. and Iran, while supply tightness and U.S. inventory drawdowns provided some support.

Brent crude futures rose 78 cents, or 0.74%, to $105.80 a barrel by 0341 GMT, and U.S. West Texas Intermediate futures were up 84 cents, or 0.85%, at $99.10.

Both benchmarks dropped more than 5.6% on Wednesday to an over one-week low after U.S. President Donald Trump said negotiations with Iran were in the final stages, but also threatened further attacks if Tehran did not agree to a peace ⁠deal.

"The oil market remains overly sensitive to Iran-related headlines, with participants continuing to pin considerable hope on reports that talks between the U.S. and Iran are progressing," ING analysts said in a note on Thursday.

"We’ve been in this situation multiple times before, which ultimately led to disappointment," they added, forecasting the Brent price would average $104 per barrel in the current quarter.

Iran warned against further attacks and announced steps entrenching its control of the crucial Strait of Hormuz, which before the war carried oil and liquefied natural gas shipments equal to about 20% of global consumption but has been mostly closed.

On Wednesday, Iran announced a new "Persian Gulf Strait Authority," saying there would be a "controlled maritime zone" in the Strait of Hormuz.

Iran effectively ⁠closed the strait in response to the U.S. and Israeli attacks that started the war on February 28. Most of the fighting has stopped since an April ceasefire, but while Iran is limiting traffic through Hormuz, the U.S. has blockaded its coastline.

The supply losses from the key Middle Eastern region because of the war have forced countries to pull from their commercial and strategic inventories ⁠at a rapid rate, raising concerns about draining them.

The U.S. Energy Information Administration said on Wednesday the country withdrew nearly 10 million barrels of oil from its Strategic Petroleum Reserve last week, the biggest drawdown on record.

Underlining the impact of the supply disruptions in the ⁠Middle East was EIA data showing a bigger-than-expected decline in U.S. crude oil inventories last week.

"The drawdown in oil inventories will make it difficult for oil prices to remain low," said Mingyu Gao, chief researcher for energy and chemicals at China ⁠Futures.

"With the Strait of Hormuz blocked, global refined-product and onshore crude inventories are expected to fall below their lowest levels for this time of year in the past five years by late May and late June," Gao said.

(Reuters)  https://www.shafaq.com/en/Economy/Oil-prices-rally-following-US-strategic-reserves-drop

Basrah Crude Drops Despite Global Oil Rise

2026-05-21 Shafaq News- Basrah    Basrah crude slipped by less than 1% on Thursday, diverging from broader gains in global oil markets.

Basrah Heavy crude lost 76 cents, or 0.71%, to $106.85 per barrel, while Basrah Medium crude declined 0.69% to $108.95 per barrel.

Despite the drop, Iraqi crude prices remained above several Gulf benchmarks. Dubai crude stood at $105.34 per barrel, Oman crude at $106.36, Qatar Marine at $105.60, and UAE Das crude at $105.85. However, some Gulf grades traded at higher levels, with Kuwaiti crude standing at $123.62 per barrel, Saudi Arab Light registering at $116.96, and Arab Medium recording at $115.21.

Globally, Brent crude gained 0.74%, adding 78 cents to reach $105.80 a barrel. US West Texas Intermediate (WTI) rose 0.85%, reaching $99.10. https://www.shafaq.com/en/Economy/Basrah-crude-drops-despite-global-oil-rise

Gold Losses Capped By US-Iran De-Escalation Hopes

2026-05-21 Shafaq News   Gold edged lower on Thursday as higher Treasury yields and a firm dollar weighed on the metal, while hopes of a resolution to the U.S.-Iran conflict limited losses.

Spot gold was down 0.3% at $4,528.03 per ounce, as of 0611 GMT. Bullion had gained more than 1% on Wednesday after falling to its lowest level since March 30 earlier in the day.

U.S. gold futures for June delivery fell 0.1% at $4,528.90.

The dollar rose 0.1%, making greenback-priced ⁠bullion expensive for other currency holders.

"Inflation expectation, rising yields, and stronger dollar are the headwinds keeping gold prices under pressure. And these factors will continue to remain in place until we get clarity on how long the conflict is going to persist," said ANZ analyst Soni Kumari.

Gold has fallen more than 14% since the war began in late February, as the non-yielding metal tends to decline on expectations of higher interest rates.

Iran said it was reviewing Washington's latest position on ending the war after U.S. President Donald Trump suggested he was prepared to wait a few days to "get the right answers" from Tehran.

The yield on ⁠the U.S. 10-year Treasury bond was up 1 basis point at 4.578%, resuming its climb after snapping a three-day streak of declines.

Markets are increasingly pricing in possibilities of the Federal Reserve tightening monetary policy this year, with a 39% chance of a 25 basis-point hike expected in December, per CME Group's FedWatch tool.

"The overall trend of 10-year ⁠U.S. Treasury yield, since the start of early March, is still in a medium-term uptrend phase. Hence, gold bulls may not be so aggressive in beating up prices at this juncture," said Kelvin Wong, a senior market analyst ⁠at OANDA.

Minutes of the Fed's April meeting showed a majority of policymakers felt "some policy firming would likely become appropriate" if inflation stays persistently above the central bank's 2% target.

Gold is expected to remain weak ⁠in the upcoming sessions, with resistance seen at $4,645 levels and support at $4,456 levels, said Wong.

Spot silver was down 1.1% at $75.19 per ounce, platinum lost 0.9% to $1,933.13, and palladium fell 0.8% to $1,359.20.

(Reuters) https://www.shafaq.com/en/Economy/Gold-losses-capped-by-US-Iran-de-escalation-hopes

Dollar Stabilizes In Baghdad, Rises In Erbil

2026-05-21 Shafaq News- Baghdad/ Erbil   The US dollar opened Thursday’s trading mixed in Iraq, hovering around 154,000 dinars per 100 dollars.

According to Shafaq News market survey, the dollar traded in Baghdad's Al-Kifah and Al-Harithiya exchanges at 153,600 dinars per 100 dollars, unchanged from the previous session.

In the Iraqi capital, exchange shops sold the dollar at 154,000 dinars and bought it at 153,000 dinars, while in Erbil, selling prices stood at 153,500 dinars and buying prices at 153,400 dinars.

https://www.shafaq.com/en/Economy/Dollar-stabilizes-in-Baghdad-rises-in-Erbil-1

Chinese exports to Iraq plummet to $285M in April 2026

2026-05-21 Shafaq News- Baghdad   Iraq imported $285 million worth of Chinese goods in April 2026, down from $1.7 billion in the same month last year, the Iraq Future Foundation for Economic Studies and Consultations reported on Thursday.

According to Manar al-Obaidi, head of the Foundation, the decline marks a notable shift following a period of strong expansion in bilateral trade.

Figures from China’s General Administration of Customs previously showed that Chinese exports to Iraq exceeded $17 billion in 2025, marking a 57% increase compared with 2020, when total exports stood at around $10 billion.

https://www.shafaq.com/en/Economy/Chinese-exports-to-Iraq-plummet-to-285M-in-April-2026

Iraq Remains Below Top Tier Of US Treasury Investors

2026-05-21 Shafaq News- Washington    Iraq has been absent from the rankings of major foreign holders of US Treasury securities for three consecutive years, a drop from the $23 to $39 billion range it maintained annually before 2023.

The country had previously appeared on the Treasury International Capital (TIC) system's major holders list between 2012 and 2019, before dropping off in 2020 and 2021, briefly returning, then falling out again.

Total foreign holdings of US Treasuries reached $9.348 trillion by the end of March 2026, up from $9.001 trillion a year earlier. Japan led all foreign holders with $1.191 trillion, followed by the United Kingdom at $926.9 billion and China at $652.3 billion.

https://www.shafaq.com/en/Economy/Iraq-remains-below-top-tier-of-US-Treasury-investors

First Iraq-Bound Cargo Crosses Syria Since 2011

 2026-05-21 Shafaq News- Damascus   Syria’s port of Tartus on Thursday received an Iraq-bound timber shipment from Romania, marking the first international transit convoy to cross Syrian territory toward Iraq in over 14 years.

Mazen Alloush, director of public relations at Syria’s General Authority for Borders and Customs, told state news agency SANA that unloading operations had begun at the Mediterranean port before the cargo continues overland to Iraq.

The development comes amid renewed efforts by Baghdad and Damascus to revive cross-border trade and transport links disrupted by years of conflict and ISIS activity along the frontier.

Last month, Iraq reopened the Rabia border crossing with Syria for the first time in more than a decade to facilitate trade and overland fuel exports through Syrian territory, while the Al-Qaim crossing resumed commercial and passenger traffic in 2025.    https://www.shafaq.com/en/Economy/First-Iraq-bound-cargo-crosses-Syria-since-2011