Iraq Economic News and Points To Ponder Wednesday Morning 8-5-26

Iraq's Issued Currency Hits $86.3B In May

2026-08-04  Shafaq News- Baghdad   Iraq's issued currency rose to 113.560 trillion dinars ($86.3B) at the end of May 2026, up from 112.896 trillion dinars ($85.8B) a month earlier, as cash circulating outside the banking system continued to increase, according to official data released by the Central Bank of Iraq (CBI).

Compared with the end of 2025, issued currency increased to 99.799 trillion dinars ($75.8B). Net currency circulating outside banks climbed to 106.812 trillion dinars ($81.2B) at the end of May, up from 104.542 trillion dinars ($79.5B) a month earlier and 92.560 trillion dinars ($70.3B) at the close of last year.

Cash held by banks fell to 6.748 trillion dinars ($5.1B) from 8.354 trillion dinars ($6.3B) at the end of April and 7.239 trillion dinars ($5.5B) at the close of 2025.

Economic expert Mohammed Al-Hassani told Shafaq News that the increase in issued currency indicates the CBI injected additional liquidity into the economy. The continued concentration of cash outside banks, coupled with declining bank holdings, reflects the persistent preference of individuals and businesses to hold money outside the banking system, limiting banks' capacity to expand lending and support broader economic activity, he added.

https://www.shafaq.com/en/Economy/Iraq-s-issued-currency-hits-86-3B-in-May

Exclusive: Iraq’s Currency In Circulation Surges Past $86B

2026-08-04 Shafaq News- Baghdad  Iraq’s currency in circulation reached 113.560 trillion dinars ($86.3B) in May 2026, adding 13.761 trillion dinars ($10.6B), or 13.8%, from the end of 2025, according to a review by Shafaq News on Tuesday.

Currency in circulation rose steadily during the first five months of 2026, starting at 99.799 trillion dinars ($76.8B) in December 2025 before reaching 101.431 trillion dinars ($78.1B) in January. The figure then climbed to 104.614 trillion dinars ($80.5B) in February, 108.985 trillion dinars ($83.8B) in March, 112.896 trillion dinars ($85.8B) in April, and 113.560 trillion dinars ($86.3B) in May.

The largest monthly change came in March, when currency in circulation expanded by around 4.371 trillion dinars ($3.4B). The amount recorded another gain of 3.911 trillion dinars ($3.0B) in April before slowing in May, with an increase of about 664 billion dinars ($511M).

The rise coincided with pressure on Iraq’s public finances, including a gap between government revenues and spending, disruptions in oil revenue flows, and delays in salary payments for some state institutions.

Mahmoud Dagher, a financial and banking expert who previously served as a director general at the Central Bank of Iraq (CBI), described currency in circulation as a normal CBI operation but noted that it had become the only available short-term measure to provide liquidity during the current period.

Warning that the policy could contribute to inflationary pressure and place additional strain on foreign currency reserves, he stressed that Baghdad had limited alternatives and was forced to rely on the measure as the lesser of two risks.

“Iraq did not have access to external financial support or a sovereign wealth fund that could provide additional resources,” Dagher added, pointing to limited alternative oil export channels.

Earlier today, the CBI reported that Iraq’s currency in circulation stood at 113.560 trillion dinars ($86.3B) at the end of May 2026, compared with 112.896 trillion dinars ($85.8B) a month earlier, as currency circulating outside the banking system continued to expand.

https://www.shafaq.com/en/Economy/Exclusive-Iraq-s-currency-in-circulation-surges-past-86B

Oil Slides Further On Iran Diplomacy Hopes

2026-08-05 Shafaq News   Oil extended declines on Wednesday after steep falls in the previous two trading sessions, as investors waited ​to see if efforts to end the Iran war and restore traffic through ‌the blockaded Strait of Hormuz were making progress.

Brent crude futures dropped 92 cents, or about 1.2%, to $78.44 a barrel by 0330 GMT. They have tumbled more than 12% for the week thus far.

U.S. West Texas ​Intermediate futures lost $1.07, or 1.4%, to stand at $74.70 a barrel and are down ​more than 11% this week.

Qatar said on Tuesday mediators were making progress in ⁠efforts to end the war, driving oil prices lower, although Tehran has denied U.S. President ​Donald Trump's assertion that talks are underway. Brent closed more than 5% lower on Tuesday below $80 ​a barrel for the first time since July 13.

"While the immediate geopolitical premium has unwound, the broader supply picture warrants caution," said Priyanka Sachdeva, head of market insights at Phillip Nova.

"If diplomatic efforts fail and physical ​supply is ultimately affected, the current pullback could prove short-lived, with tighter inventories amplifying ​the impact of any future supply shock," Sachdeva added.

Prior to the beginning of the war, some 20% of ‌the ⁠world's oil and liquefied natural gas transited through the strait, and in March alone prices rose 50%.

"The main sticking point appears to be whether Iran will continue to insist on a degree of control over the waterway, and whether the U.S. will stand its ground and ​refuse that outcome," analysts ​from IG said ⁠in a note.

Trump and Qatar's Emir Sheikh Tamim bin Hamad Al Thani discussed efforts to narrow differences between Washington and Tehran and improve ​the prospects for a lasting settlement during a phone call on ​Tuesday, Qatar's Emiri ⁠office said.

U.S. crude and gasoline inventories rose while distillate stocks fell last week, market sources said on Tuesday, citing data from the American Petroleum Institute.

Crude stocks rose by about 2.7 million barrels ⁠in the ​week ended July 31, the sources said on condition ​of anonymity.

Official numbers from the U.S. Energy Information Administration are due at 10:30 a.m. ET (1430 GMT) on Wednesday.  (REUTERS)

https://www.shafaq.com/en/Economy/Oil-slides-further-on-Iran-diplomacy-hopes

Basrah Crudes Rise Despite Benchmark Losses

2026-08-05 Shafaq News- Basrah   Iraq’s Basrah crude climbed about 3% on Wednesday, amid losses in benchmark crude futures.

Basrah Heavy crude rose by $1.57, or 3.03%, to $53.33 per barrel, while Basrah Medium crude gained $1.57, or 2.90%, to settle at $55.63 per barrel.

Brent crude futures fell by 92 cents, or about 1.2%, to $78.44 a barrel, while US West Texas Intermediate futures lost $1.07, or 1.4%, to $74.70 a barrel.

OPEC's basket held steady at $79.50 per barrel, while Saudi Arabia's Arab Light crude rose to $74.45 per barrel.

https://www.shafaq.com/en/Economy/Basrah-crudes-rise-despite-benchmark-losses

Iraq Ships 7K+ Tons Of Cement To Syria Monthly

2026-08-05 Shafaq News- Baghdad/ Damascus   Iraq's state-run Al-Qaim Cement Plant has reached its full design capacity of 840,000 metric tons annually, enabling it to meet domestic demand while exporting around 7,500 metric tons of sulfate-resistant cement to Syria each month.

The General Company for Iraqi Cement, part of the Ministry of Industry and Minerals, said the facility produces about 70,000 metric tons monthly, supplying Al-Anbar and other Iraqi provinces. It added that the plant operates around the clock to strengthen Iraq's self-sufficiency and expand the country's cement exports.

Iraq launched its first cement exports to Syria through the Al-Waleed border crossing in May. At the time, Musheer al-Ramah, head of the media office for Syria's border crossings and customs authority, said the shipments were expected to increase local supply, stabilize prices, and support Syria's construction sector and related industries.

A senior economic adviser at Syria's Ministry of Economy previously told Shafaq News that Baghdad and Damascus aim to double bilateral trade within the next two years, with commercial exchange expected to surpass pre-war levels before the end of 2027.

https://www.shafaq.com/en/Economy/Iraq-ships-7K-tons-of-cement-to-Syria-monthly

Small Tanker Fleet Costs Iraq Millions In Shipping Revenue

2026-08-05 Shafaq News- Baghdad   Iraq’s limited oil tanker fleet is forcing the country to depend on foreign vessels to transport most of its crude exports, leaving Baghdad unable to secure additional revenues from shipping and insurance services, oil sector officials told Shafaq News on Wednesday.

The country operates only a small number of tankers through the state-run Iraqi Oil Tanker Company, including the large vessels Akad and Baghdad, along with Tigris and Euphrates. However, those vessels are insufficient to handle the millions of barrels of crude Iraq sends to global markets each day.

Officials, who spoke on condition of anonymity, noted that the use of foreign carriers also reduces the additional value generated from oil exports compared with some Gulf producers that have developed extensive maritime networks alongside their energy industries.

Iraq’s current situation stems from decades of disruption that weakened its maritime capabilities. The country previously maintained a larger fleet, but wars and international sanctions contributed to the decline of its tanker operations and forced many vessels out of service.

“Rebuilding a modern national tanker fleet could improve the security of Iraq’s exports, reduce dependence on foreign shipping companies and create new sources of revenue for the state,” the officials added.

According to the mechanisms used by Iraq’s state-run Oil Marketing Company (SOMO), most crude sales are conducted under the Free on Board (FOB) system, meaning its responsibility ends once the oil is loaded onto vessels at export terminals. After that stage, buyers cover transportation costs, insurance and the risks associated with moving the cargo.

Oil remains the backbone of Iraq’s economy, with crude shipments exceeding 3 million barrels per day (bpd) and income from petroleum sales accounting for more than 84% of government revenues.

Read more: Iraq’s oil bottleneck: Abundance trapped by dependency 

https://www.shafaq.com/en/Economy/Small-tanker-fleet-costs-Iraq-millions-in-shipping-revenue