Iraq Economic News and Points To Ponder Thursday Afternoon 7-16-26

Iraq Inflation Slows 1.3% In May

2026-07-16 15:15   Shafaq News- Baghdad  Iraq’s annual inflation rate fell to 3% in May from 4.3% in April, while consumer prices declined 1.2% month on month, according to the Statistics and GIS Authority. The Consumer Price Index dropped to 111.2 points from 112.5 in April.

Manar Al-Obaidi, head of the Iraq Future Foundation for Economic Research and Consultations, attributed the slowdown mainly to lower food, vegetable, and fuel prices.

Food and non-alcoholic beverage prices fell 3.1% from April, while housing, water, electricity, and gas declined 1.1%. Meat prices rose 1.7%, with dairy products, eggs, and fish also recording increases.

https://www.shafaq.com/en/Economy/Iraq-annual-inflation-slows-1-3-in-May

Oil Prices Slip On Hormuz Shipping Route Threats

2026-07-16 01:12    Shafaq News    Oil prices turned lower on Thursday as traders took profits and evaluated the risks from a new wave of U.S. strikes on Iranian military installations, which fuelled fears of renewed full-scale conflict and supply disruptions in the Strait of Hormuz.

The United States struck Iran's coastal defences and missile sites on Wednesday after reimposing a naval blockade of its ports, while Iran threatened to shut off more regional energy exports, saying it was engaged in an "existential war" with America.

After initially rising for a fourth straight session, Brent crude futures slipped 24 cents, or 0.28%, to $84.95 a barrel as of 0435 GMT, while U.S. West Texas Intermediate futures fell 15 cents, or 0.19%, to $79.45 a barrel. Brent had gained almost $1 earlier ⁠in the session and both contracts remained close to one-month highs.

"Geopolitical risks remain firmly supportive for oil, but after a strong rally, traders are adopting a wait-and-watch approach," Phillip Nova senior market analyst Priyanka Sachdeva said. "The focus has shifted from the threat itself to whether there is any tangible disruption to oil flows and how both the U.S. and Iran choose to respond in the coming days."

Oil prices have gained this week as attacks deepened supply disruption in the Strait of Hormuz, which handled about a fifth of the world's oil and liquefied natural gas trade before the war began.

Fewer vessels passed through the Strait of Hormuz on Wednesday, the first day after the U.S. reimposed its naval blockade on Iran. Seven crossed on Wednesday, down from 13 the previous day.

Hostilities between Iran ⁠and the U.S. reignited last week, fraying an already fragile truce reached in June after several months of fighting.

"While mediation efforts by neighbouring countries continue and the consensus view is that a full-scale war is unlikely, WTI could still rise to $85–$87 depending on how the conflict develops," said Hiroyuki Kikukawa, chief strategist of Nissan Securities Investment.

Analysts say Iran has signalled it may use its Houthi allies in Yemen to shut the Bab el-Mandeb gateway ⁠to the Red Sea, opening a new front against Washington and putting a second of the world's most vital energy arteries at risk.

Reuters also reported on Wednesday that U.S. officials said the strikes on Iran could pave the way for "more complex" operations against the country, adding to market jitters.

Goldman Sachs said Brent could ⁠exceed $110 in the fourth quarter if the Gulf export recovery continues to stall, but could fall into the $60s by year-end if tensions ease and production recovers faster than expected.

ING analysts cautioned in a note that the supply disruptions are flaring back up at ⁠a time when U.S. commercial oil inventories are at the lowest levels since 2022, and the lowest levels for the season since 2018.

"The concern is that renewed oil supply disruptions come amid the large inventory drawdowns through the second quarter, leaving the market more vulnerable."  (Reuters)https://www.shafaq.com/en/Economy/Oil-prices-slip-on-Hormuz-shipping-route-threats

Basrah Crudes Rise Despite Global Benchmark Losses
026-07-16 02:58   Shafaq News- Basrah  Iraq’s two Basrah crude grades gained ground in Thursday trading, even as major global oil benchmarks moved lower.

Basrah Heavy crude rose 44 cents to $58.43 per barrel, marking a 0.76% increase. Basrah Medium also added 44 cents, settling at $60.73 per barrel, up 0.73%.

Globally, Brent crude slipped 24 cents, or 0.28%, to $84.95 a barrel, while US West Texas Intermediate (WTI) declined 15 cents, or 0.19%, to $79.45 a barrel.https://www.shafaq.com/en/Economy/Basrah-crudes-rise-despite-global-benchmark-losses

Dollar Edges Lower In Baghdad And Erbil

2026-07-16 03:51   Shafaq News- Baghdad/ Erbil  The US dollar opened Thursday's trading lower in Iraq, hovering around 153,000 dinars per 100 dollars in Baghdad and Erbil.

According to Shafaq News market survey, the dollar traded in Baghdad's Al-Kifah and Al-Harithiya exchanges at 153,000 dinars per 100 dollars, down from Wednesday's 153,300 dinars.

In the Iraqi capital, exchange shops sold the dollar at 153,500 dinars and bought it at 152,500 dinars. In Erbil, selling prices stood at 153,050 dinars and buying prices at 152,950 dinars.

https://www.shafaq.com/en/Economy/Dollar-edges-lower-in-Baghdad-and-Erbil-6

Gold Prices Drop In Baghdad, Stabilize In Erbil

2026-07-16 05:16   Shafaq News- Baghdad/ Erbil   On Thursday, gold prices edged slightly lower in Baghdad markets, while stabilized in Erbil, hovering around 860,000 IQD per mithqal, according to Shafaq News market survey.

Gold prices on Baghdad's Al-Nahr Street recorded a selling price of 862,000 IQD per mithqal (equivalent to five grams) for 21-carat gold, including Gulf, Turkish, and European varieties, with a buying price of 858,000 IQD. The same gold had sold for 864,000 IQD on Wednesday.

The selling price for 21-carat Iraqi gold stood at 832,000 IQD, with a buying price of 828,000 IQD.

In jewelry stores, 21-carat Gulf gold ranged between 860,000 and 870,000 IQD per mithqal, while Iraqi gold sold for between 830,000 and 840,000 IQD.

In Erbil, 22-carat gold was sold at 915,000 IQD per mithqal, 21-carat gold at 873,000 IQD, and 18-carat gold at 749,000 IQD.

https://www.shafaq.com/en/Economy/Gold-prices-drop-in-Baghdad-stabilize-in-Erbil-8

Basra Port Operations Continue After Drone Strikes Ship

2026-07-16 05:51   Shafaq News- Basra  Maritime traffic at Basra Oil Port in southern Iraq is proceeding normally after an unidentified drone struck a docked oil tanker on Thursday without exploding or causing damage.

"There is no halt to export operations or work at the port of Basra, and conditions are proceeding entirely normally," a source at the Iraqi Ports Company told Shafaq News.

A security source said the tanker, the Liberian-flagged Supreme Prosperity, with a capacity of two million barrels, was berthed at quay No. 1 at Basra Oil Port when the drone struck it. The source confirmed no material or human losses were recorded.

https://www.shafaq.com/en/Economy/Drone-hits-cargo-ship-bound-for-Basra  

Oil Generates Four-Fifths Of Iraq’s Revenue Through May

2026-07-16 08:25    Shafaq News- Baghdad  Oil revenues accounted for 84% of Iraq’s 33.747 trillion Iraqi dinars ($25.65B) in federal income through the end of May 2026, according to budget execution data released by the Finance Ministry.

The figures showed oil receipts reached 27.270 trillion dinars ($20.73B), while non-oil revenue totaled 6.477 trillion dinars ($4.92B), accounting for the remaining 16%. Read more: Iraq’s oil bottleneck: Abundance trapped by dependency

Government spending reached 45.070 trillion dinars ($34.25B) over the same period, comprising 41.908 trillion dinars ($31.85B) in current expenditure, 3.094 trillion dinars ($2.35B) for debt servicing, and 13.6 billion dinars ($10.34M) in capital expenditure.

Employee compensation, according to the data, remained the largest spending item at 25.556 trillion dinars ($19.42B), followed by 11.373 trillion dinars ($8.64B) for social welfare. Grants, subsidies, interest payments, and other allocations totaled 3.301 trillion dinars ($2.51B), while goods accounted for 1.542 trillion dinars ($1.17B) and services 108.3 billion dinars ($82.31M).

Investment spending stood at 1.627 trillion dinars ($1.24B), including 915.9 billion dinars ($696.08M) for the national investment program, 605.9 billion dinars ($460.48M) for regional development projects, and 71.4 billion dinars ($54.26M) for petrodollar-funded projects. Buildings and public services received the largest share at 992.4 billion dinars ($754.22M), followed by transport and communications with 269.5 billion dinars ($204.82M), industry with 249 billion dinars ($189.24M), education with 99.9 billion dinars ($75.92M), and agriculture with 15.9 billion dinars ($12.08M).

Iraq, OPEC’s second-largest oil producer, relies on crude exports for about 90% of federal revenue, a dependence that has come under growing pressure following disruptions to shipping through the Strait of Hormuz, which carries roughly one-fifth of global oil supplies. In late March, economic expert Nabil Al-Marsoumi estimated that the country had cut production by about 2.9 million barrels per day, the largest reduction among OPEC members.

Read more: No exit but Hormuz: Iraq’s economic vulnerability exposed

https://www.shafaq.com/en/Economy/Oil-generates-four-fifths-of-Iraq-s-revenue-through-May