Iraq Economic News and Points To Ponder Wednesday Afternoon 9-2-26
Iraq's Salary, Welfare Spending Reaches $34B In H1
2026-09-02 Shafaq News- Baghdad Iraq spent about 44.627 trillion dinars ($34.1B) on public-sector salaries and social welfare in the first half of 2026, equivalent to nearly 82% of total federal spending during the period, Finance Ministry data showed.
Employee compensation reached 30.769 trillion dinars ($23.5B), while social welfare spending totaled 13.858 trillion dinars ($10.6B), for a monthly average of about 7.438 trillion dinars ($5.68B).
The combined bill exceeded Iraq’s total first-half revenue of 35.946 trillion dinars ($27.4B) by about 8.681 trillion dinars ($6.63B). Overall federal spending reached 54.673 trillion dinars ($41.7B), while oil generated about 79% of state revenue.
The International Monetary Fund said in a 2026 technical report that Iraq remained vulnerable to oil-price fluctuations and called for fiscal adjustments, including reducing the public wage bill and increasing non-oil revenue.
Read more: No exit but Hormuz: Iraq's economic vulnerability exposed
https://www.shafaq.com/en/Economy/Baghdad-salary-welfare-spending-reaches-34B-in-H1
Technical Outage Halts Electronic Payments Across Iraq
2026-09-02 Shafaq News- Baghdad A sudden technical failure in Iraq’s electronic payment system halted cash withdrawals for employees, retirees and social welfare beneficiaries across the country on Wednesday, a government source told Shafaq News.
Technical teams are working to identify the fault and restore service, though the source provided no timeline for operations to resume.
The outage caused crowds at payment outlets after customers were unable to withdraw funds. No government agency or electronic payment company had issued a statement explaining the cause or expected duration of the disruption at the time of publication
https://www.shafaq.com/en/Economy/Technical-outage-halts-electronic-payments-across-Iraq
Oil Prices Reach $95 After US-Iran Military Strikes
2026-09-02 Shafaq News Oil prices rose in early trade on Wednesday, extending the previous session's surge, as concerns over supply disruption intensified after the U.S. and Iran exchanged strikes overnight, dimming hopes for a quick easing of tensions in the Middle East.
Brent crude futures rose 75 cents, or 0.8%, to $95.40 a barrel by 0345 GMT, while U.S. West Texas Intermediate crude futures climbed 44 cents, or 0.5%, to $90.66.
Both contracts soared more than $4 on Tuesday, marking Brent's largest gain since July 24 and WTI's largest since July 23.
The U.S. said it had launched a series of airstrikes against targets in Iran overnight, prompting a response from Tehran, in the most serious escalation of the conflict between the two countries in weeks.
The Islamic Revolutionary Guard Corps said the U.S. attacks would further restrict traffic through the Strait of Hormuz, a critical waterway that carried about one-fifth of the global oil consumed before the conflict and which Iran has effectively closed to commercial shipping.
"Developments in recent days brought risks to regional oil supplies back into focus...We’ve seen oil flow through the Strait of Hormuz despite the stalemate between the US and Iran, but rising tensions clearly put crossings at risk," said ING analysts in a client note.
The IRGC also said it had targeted a U.S. military base in Jordan with ballistic missiles that it claimed had killed a large number of U.S. forces, while Iranian state media reported a large-scale drone attack on a U.S. base in Bahrain in response to the American strikes.
Jordan's military said its air defences intercepted 10 of 13 ballistic missiles that entered its airspace, while two U.S. officials said no American casualties had been reported so far from the attacks. Separately, Kuwait said its armed forces were responding to hostile drone activity.
The latest exchange followed a weekend flare-up in hostilities, the first since July, and came after attacks on two tankers departing the Strait of Hormuz on Monday, causing further disruptions to oil supplies and forcing traders to seek alternative crude shipments.
"The oil market is no longer pricing just the risk of war; it is increasingly pricing the cost of an unresolved war," said Priyanka Sachdeva, Phillip Nova's head of market insights.
"Until there is clear evidence that negotiations can produce a lasting resolution and that normal oil flows through the Strait are returning, the risk premium in crude is likely to remain elevated."
Meanwhile, in the U.S., the world's largest oil producer, crude inventories fell by 2.6 million barrels in the week ended August 28, while distillate stocks, which include diesel and heating oil, declined by 265,000 barrels, market sources said, citing data from the American Petroleum Institute. (REUTERS)
https://www.shafaq.com/en/Economy/Oil-prices-reach-95-after-US-Iran-military-strikes
Basrah Crudes Slip Amid Benchmark Gains
2026-09-02 Shafaq News- Basrah Iraq’s Basrah crude prices posted modest losses on Wednesday, even as global oil prices moved higher, according to oil price data reviewed by Shafaq News.
Basrah Heavy crude fell 9 cents, or 0.11%, to $80.34 a barrel, while Basrah Medium crude also slipped 9 cents to $83.64 a barrel from the previous session.
Brent futures rose 75 cents, or 0.8%, to $95.40 a barrel. US West Texas Intermediate crude gained 44 cents, or 0.5%, to $90.66.
Among regional crude benchmarks, the UAE’s Murban crude rose $7.70 to $106.15 a barrel, an increase of 7.82%. Oman crude on the Dubai Energy Exchange climbed $3.88, or 4.29%, to $94.31 a barrel.
The OPEC basket also rose $2.39, or 2.67%, to $91.98 a barrel, while Kuwait’s export crude price increased $2.21, or 2.53%, to $89.65 a barrel. https://www.shafaq.com/en/Economy/Basrah-crudes-slip-amid-benchmark-gains-5
Iraqi Oil Exports Jump 73% In August
2026-09-02 Shafaq News- Baghdad Iraq’s oil exports rose about 73% in August to around 2.34 million barrels per day (bpd), up from roughly 1.35 million bpd in July, as steep discounts and alternative shipping arrangements helped restore flows disrupted by the Strait of Hormuz crisis.
Preliminary estimates from Vortexa and Kpler put August volumes at 2.3 million bpd and 2.17 million bpd, respectively, Reuters reported, still well below February’s pre-war levels of around 3.7 million bpd and 3.362 million bpd.
Read more: SCOOP: Iraq in talks with US-Iran over Hormuz oil shipments
Iraq remains particularly exposed to disruptions in Hormuz, with around 95% of its oil normally leaving through southern Gulf terminals and sales generating roughly 90% of federal revenue. The State Oil Marketing Organization (SOMO) offered August-loading Basra crude at discounts of $25 to $30 per barrel, attracting renewed interest from Chinese and Indian refiners and major trading firms. Economist Nabil Al-Marsoumi linked the rebound to lower prices and the use of smaller tankers to carry cargoes beyond Hormuz for resale.
SOMO has further facilitated ship-to-ship transfers off Oman, enabling buyers to receive Iraqi oil without sending their own vessels through the strait.
Chinese demand has extended into September, with refiners purchasing at least 16 million barrels of Basra crude for delivery this month. The buying represents a sharp reversal from July, when customs data showed China’s imports from Iraq collapsing 98% amid shipping disruptions.
Read more: Exclusive: SOMO seeks safe Hormuz passage for Iraqi oil exports
https://www.shafaq.com/en/Economy/Iraqi-oil-exports-jump-73-in-August
Dollar Rises In Baghdad And Erbil Markets
2026-09-02 Shafaq News- Baghdad/ Erbil The US dollar opened Wednesday's trading higher in Iraq, hovering around 154,500 dinars per 100 dollars.
According to a Shafaq News market survey, the dollar traded in Baghdad's Al-Kifah and Al-Harithiya exchanges at 154,500 dinars per 100 dollars, up from the previous session's 154,250 dinars.
In the Iraqi capital, exchange shops sold the dollar at 155,000 dinars and bought it at 154,000 dinars, while in Erbil, selling prices stood at 154,450 dinars and buying prices at 154,400 dinars.
https://www.shafaq.com/en/Economy/Dollar-rises-in-Baghdad-and-Erbil-markets-1
Gold Prices Fall In Baghdad And Erbil
2026-09-02 Shafaq News- Baghdad/ Erbil Gold prices hovered around 950,000 IQD per mithqal in Baghdad and Erbil markets on Wednesday, according to a Shafaq News market survey.
On Baghdad's Al-Nahr Street, 21-carat gold, including Gulf, Turkish, and European varieties, sold for 945,000 IQD per mithqal (equivalent to five grams), with a buying price of 941,000 IQD, down from 960,000 IQD on Tuesday.
The selling price for 21-carat Iraqi gold stood at 915,000 IQD per mithqal, with a buying price of 911,000 IQD.
At jewelry stores, 21-carat Gulf gold sold for between 945,000 and 955,000 IQD per mithqal, while Iraqi gold ranged from 915,000 to 925,000 IQD.
In Erbil, 22-carat gold sold for 978,000 IQD per mithqal, 21-carat gold reached 933,000 IQD, and 18-carat gold stood at 800,000 IQD. https://www.shafaq.com/en/Economy/Gold-prices-fall-in-Baghdad-and-Erbil-6-1
Baghdad And Ankara Push Road-And-Rail Border Connection
2026-09-02 Shafaq News- Baghdad/ Ankara Iraq and Turkiye are moving to implement a new road-and-rail border crossing at Fishkhabur-Ovakoy and connect it to Iraq’s Development Road project, Border Ports Authority chief Lt. Gen. Omar Al-Waeli said on Wednesday.
Al-Waeli, who led an Iraqi delegation to Ankara, noted that talks focused on implementing the July 28 transport memorandum using routes, maps, and locations already identified by joint technical committees. The agreement, signed by the Iraqi and Turkish transport ministries, covers railway and road transport through the planned crossing and related infrastructure to expand cross-border capacity.
Read more: No exit but Hormuz: Iraq's economic vulnerability exposed
The delegation, which included the heads of Iraq’s road transport and railway authorities, also joined Turkish and Syrian officials for trilateral talks on increasing trade and transit traffic, facilitating the movement of goods and passengers, and improving coordination between border agencies.
The Fishkhabur-Ovakoy link is intended to connect with the Development Road, a planned 1,200-kilometer rail and highway corridor from Grand Al-Faw Port in southern Iraq to Turkiye and onward toward European markets.
Read more: Iraq’s Development Road: Geopolitics, rentierism, and broader connectivity
https://www.shafaq.com/en/Economy/Baghdad-and-Ankara-push-road-and-rail-border-connection