Key Takeaways:

• POLITICS: Iraq’s Finance Ministry Halts Funding to the KRG – On May 28, Iraq’s Finance Ministry sent a letter to the Kurdistan Regional Government (KRG), informing it that it had exceeded its allocation under the federal budget law. According to the letter, the ministry argues that the KRG spent more than IQD 13.5 trillion, surpassing its assigned 12.76% share of the federal budget. Therefore, the ministry stated it cannot continue funding KRG expenses for the remainder of the year. The letter also highlights a significant gap between the funds disbursed to the KRG and the amounts remitted by the KRG from oil and non-oil revenues since 2023. Specifically, it claims the KRG collected nearly IQD 20 trillion in revenue since 2023, but remitted only IQD 598 billion to the federal treasury. This deficit, the ministry argues, makes further funding a violation of the budget law and Federal Supreme Court rulings. The Kurdistan Democratic Party condemned the move as a violation of Kurdistan’s constitutional rights and the principles of the government formation agreement. The Patriotic Union of Kurdistan also criticized the halt, arguing that it violates Federal Supreme Court rulings mandating timely payment of public sector salaries in the region. Kurdish parties plan to send a joint memo to Prime Minister Sudani and the Federal Supreme Court to contest the ministry’s decision. In other developments, on May 26, leaders of the Coordination Framework announced plans to form joint electoral lists to compete in the November parliamentary elections in the provinces of Diyala, Salah ad-Din, and Ninewa. On May 27, thirteen smaller political entities announced the establishment of Tahaluf al-Badeel (The Alternative Coalition), a new alliance aiming to present a civil and reformist political agenda as an alternative to what they describe as the “failure, marginalization, and division” caused by the ruling parties. more…
• SECURITY & HUMANITARIAN: Authorities Thwart Large-Scale Smuggling Scheme; Friendly Fire and Explosions Leave Casualties Among Security Forces – On May 23, Iraq’s National Security Service announced that its agents had blocked a massive sulfur-smuggling operation at the port of Umm Qasr. Authorities seized nearly 110,000 tons of sulfur from trucks, warehouses, and a cargo ship. Fifteen individuals affiliated with the company involved were arrested for using forged export licenses. The statement did not identify the company or the shipment’s destination. On May 25, six members of the Popular Mobilization Forces (PMF, 41st Brigade) were injured when a fighter accidentally mishandled a hand grenade. In Wasit province, a police emergency unit officer opened fire on his colleagues, killing one and wounding three others, reportedly during a mental health crisis. On May 27, Iraq’s National Security Service reported that one of its personnel was killed and seven others wounded during an operation in Basra targeting weapons traffickers. The casualties occurred when an explosive device detonated as officers were raiding a site believed—based on a suspect’s confession—to contain more than 90 grenades. more…
• ECONOMY & CLIMATE: Water Reserves at 80-Year Low; Baghdad Sues KRG Over Energy Deals; Wheat Harvest Promising – On May 25, Iraqi officials warned that the country’s water reserves are at their lowest levels in nearly 80 years following a season of poor rainfall. A spokesperson for the Water Resources Ministry said reserves had dropped to just 10 billion cubic meters—well below the 18 billion cubic meters the ministry had projected. On May 26, the Oil Ministry reported that Iraq’s oil exports in April averaged 3.365 million barrels per day (bpd), about 75,000 bpd below March levels. April exports generated $6.738 billion in revenue—roughly $1.2 billion less than in March. Nearly all exports originated from southern and central fields, as pipeline exports from Kirkuk and the Kurdistan region remain suspended. On May 27, oil officials stated that the federal Oil Ministry has filed a lawsuit against the KRG over two contracts it signed with U.S. energy firms HKN Energy and WesternZagros to develop the Miran gas field and the Topkhana-Kurdamir oil and gas blocks. The ministry argued these agreements violate Iraq’s constitution and laws by bypassing federal authority. On May 29, the Trade Ministry announced that wheat farmers have delivered over 2.3 million tons of grain since the beginning of the harvest season. The total harvest is expected to exceed four million tons, ensuring Iraq’s self-sufficiency in wheat for the third consecutive year. In other developments, on May 22, the Ministry of Electricity said the national grid lost nearly 3,500 megawatts due to a sharp drop in natural gas supplies from Iran. more…

For more background on most of the institutions, key actors, political parties, and locations mentioned in our takeaways or in the stories that follow, see the ISHM Reference Guide.

POLITICS: Iraq’s Finance Ministry Halts Funding to the KRG

On May 26, the leaders of the Coordination Framework issued a statement in which they announced that they will create joint lists for the purpose of competing in the November parliamentary election in the provinces of Diyala, Salah ad-Din, and Ninewa. The decision was made in light of outputs from past elections, the statement explained. The announcement reflects a modification of the Framework’s nationwide campaign strategy. Last month, the Framework leaders said their respective parties will compete in the November election using separate electoral lists that would coalesce after the election to reconstitute the Coordination Framework. This week’s move suggests the Framework leaders are keen to ensure solid collective gains by their parties for the coalition in provinces where Sunni Arab and Kurdish communities form a majority of the population. 

On May 27, thirteen Iraqi political entities announced the establishment of a new political coalition that aims to present a civil and reformist political project as an alternative to what they describe as the “failure, marginalization, and division” created by ruling parties. The members of the newly formed “Alternative Coalition” (Tahaluf al-Badeel) affirmed their commitment to active participation in upcoming parliamentary elections. The statement emphasizes that this coalition represents a will to “rebuild the state based on the principles of citizenship, justice, and dignity,” adding that the coalition seeks to offer “a national civil and reformist framework.” The thirteen members of the coalition include the Iraqi Communist Party, al-Bayt al-Watani, the Iraqi Republican Assembly Party, the National Civil Movement, the Iraqi Economic Alliance, the Iraq Builders Trend, the Iraqi Riyada Party, and several other groups.

On May 28, news reports citing political sources said that the Administrative Law Court has ruled to repeal a decision in March by the Ninewa provincial council to remove its chairman, Ahmed al-Hasoud. On March 5, the provincial council in Ninewa voted to sack Hasoud after the latter missed a council meeting where he was to face questions about his qualifications and decisions while in office. Hasoud, a member of al-Aqd al-Watani, a bloc affiliated with Popular Mobilization Chairman Falih al-Fayyadh, was accused of fabricating his college degree and committing a number of administrative violations, including in the appointment of mayors and the sacking of one of his deputies. 

On May 28, Iraq’s Finance Ministry sent a letter to the Kurdistan regional government (KRG) informing it that the KRG has exceeded its allocations under the federal budget law, multiple news reports said. According to the letter, the ministry argues that the KRG has spent more than IQD 13.5 trillion, exceeding its assigned 12.76% share of the federal budget. Therefore, the ministry cannot continue to fund KRG expenses for the remaining months of this year, the letter argued. The letter also points to large deficits between funds disbursed to the KRG by the Finance Ministry and the amounts remitted by the KRG from oil and non-oil revenue since 2023. Specifically, the letter claims the KRG collected nearly IQD 20 trillion in revenue since 2023, split roughly evenly between oil and non-oil sources. However, the KRG has sent only IQD 598 billion to the federal treasury during the same period. This large deficit, the letter argues, prevents the ministry from continuing to fund the KRG, as that would constitute a violation of the budget law and Federal Supreme Court orders. Reports tracked by ISHM indicate that the KRG has been remitting about IQD 50 billion on average each month to the federal Finance Ministry as remittance for non-petroleum revenue. The KRG has not been sharing its oil revenue with the federal government amid the continued halt of exports via the Iraq-Turkey pipeline. In response to the letter, the Kurdistan Democratic Party (KDP) condemned the Finance Ministry’s move as a violation of the constitutional rights of the Kurdistan region and the principles of the government formation agreement. The Patriotic Union of Kurdistan (PUK) also condemned the funding halt, arguing that it violates Federal Supreme Court orders regarding the timely payment of public sector salaries in the region. Kurdish parties plan to send a joint memo to Prime Minister Sudani and the Federal Supreme Court to contest the Finance Ministry’s decision. Meanwhile, government employees who have been protesting salary delays for months blamed the KRG for the latest setback. Protest organizers argued that the KRG exacerbated the budget disputes by repeatedly reneging on agreements, refusing to hand over the oil and customs revenue, and defying the Federal Supreme Court order regarding the domiciliation of  paychecks  for government employees. 

Sources cited in this section include: INA, ISHM archive, Shafaq, Iraq Observer, al-Aalem al-Jadeed, PUKMedia, Kurdistan24, Rudaw, Baghdad Today.

SECURITY & HUMANITARIAN: Authorities Thwart Large-Scale Smuggling Scheme; Friendly Fire and Explosions Leave Casualties Among Security Forces

On May 23, Iraq’s National Security Service said its agents blocked a massive shipment of sulfur that was about to be smuggled out of the Umm Qasr South Port. During the operation, authorities seized nearly 110,000 tons of sulfur from trucks, warehouses, as well as a cargo ship loaded with the substance, the service said in a statement. Authorities arrested 15 individuals working at the company that was operating the scheme, which involved the use of forged export licenses. The statement did not specify the intended destination for the smuggled goods.

On May 25, unidentified gunmen attacked the Basra office of lawmaker Mustafa Sand in an early morning drive-by shooting, the parliamentarian said in a post on social media. Sanad, who is affiliated with the Coordination Framework, claimed that this was the second attack of its kind to target his Basra office this year.  

On May 25, security sources in Salah ad-Din province said that six members of the Popular Mobilization Forces (PMF) were injured in an incident involving a PMF fighter “mishandling” a hand grenade. The Incident reportedly occurred at a base for the PMF 41st brigade in the area of Tel al-Thahab. To the south, security sources in Wasit province reported another friendly fire incident. A member of the police emergency unit opened fire on his colleagues, killing one and wounding three, the sources said. The shooter is said to have experienced a mental health crisis that triggered the incident. 

On May 27, Iraq’s National Security Service said that one of its personnel was killed and seven other officers were wounded during an operation targeting weapons trafficking in Basra. The officers were raiding a cache believed (based on the confessions of an arrested suspect) to hold more than 90 grenades when an explosive device went off, resulting in the casualties, the service said in a statement. 

Sources cited in this section include: INA, Shafaq, al-Sumaria. 

ECONOMY & CLIMATE: Water Reserves at 80-Year Low; Baghdad Sues KRG Over Energy Deals; Wheat Harvest Promising

On May 22, Iraq’s Ministry of Electricity said that the power grid lost nearly 3,500 megawatts due a sharp decline in natural gas supplies coming from Iran. In a statement, the ministry explained that Iranian gas imports dropped from the contracted volume of 45 million cubic meters/day to just 20 million cubic meters/day, depriving power plants of needed fuel. A similar disruption to Iranian gas imports last November deprived the grid of 5,500 megawatts. The worsening electricity situation has reportedly sparked protests in at least two provinces in southern Iraq.

On May 25, Iraqi water officials warned that the country’s water reserves are at their lowest levels in decades after a season of paltry rainfall. According to a spokesman for the Water Resources Ministry, the country’s water reserves ahead of the scorching summer months stood at only 10 billion cubic meters, just over half of the 18 billion cubic meters the ministry had projected. The current reserve is about half the volume that Iraq had at the same point last year, the spokesman added. The situation represents the worst draining of water reserves that Iraq has experienced in nearly 80 years, the spokesman, Khalid Shamal explained. 

On May 26, Iraq’s Oil Ministry said that crude oil exports during April totaled more than 100.9 million barrels, for an average of 3.365 million barrels per day (bpd). The April exports are about 75,000 bpd below the levels reported in March. In its statement, the Ministry of Oil said the exports generated $6.738 billion in revenue, about $1.2 billion below March. Nearly all of the oil produced came from fields in southern and central Iraq and was exported through the ports of Basra, while small amounts averaging slightly less than 10,000 bpd were exported by trucks to Jordan. Exports by pipeline from the northern fields in Kirkuk, as well as fields under the control of the Kurdistan regional government, remained suspended. 

On May 26, Iraq and the UN Food and Agriculture Organization (FAO) announced the launch of Iraq’s first project to be funded through the Green Climate Fund (GCF) with co-funding from Canada and Sweden. The $39 million project, titled “Strengthening Climate Resilience of Vulnerable Agricultural Livelihoods in Southern Iraq,” aims to benefit rural households in the provinces of Karbala, The project envisions interventions designed to increase the efficiency of irrigation systems, providing solar-powered irrigation mechanisms, as well as reclaiming lands that had suffered degradation, and encouraging the adoption of more sustainable practices in managing land and water resources. Additionally, the project will focus on “strengthening Water User Associations, empowering rural women and youth, and introducing digital tools and early warning systems to mitigate risks and build resilience,” the project announcement explained.

On May 27, Iraqi oil officials told The National that the federal Oil Ministry has filed a lawsuit against the Kurdistan regional government (KRG) over two contracts the latter had signed with U.S. energy companies. Last week, the KRG Ministry of Natural Resources signed two oil and gas deals with U.S. companies HKN Energy and WesternZagros. HKN will develop the Miran block, estimated to hold 8 trillion cubic feet of natural gas, while WesternZagros will develop the Topkhana-Kurdamir blocks, estimated to hold another 5 trillion cubic feet of gas and 900 million barrels of oil, KRG officials said. News of the deals was met with objections from Iraq’s federal government, with Iraq’s Oil Minister calling the deals “null and void.” The Oil Ministry argued the deals violated Iraq’s constitution and laws, but pointed out that Baghdad welcomes doing business with American companies so long as the deals are signed without excluding the federal government. 

On May 29, Iraq’s Trade Ministry said that wheat farmers across the country have delivered more than 2.3 million tons of grain since the beginning of the current harvest season, with deliveries continuing at a pace exceeding 100,000 tons per day. Total harvest is expected to exceed four million tons, which would allow Iraq to be self-sufficient in wheat for the third consecutive year, according to the director general of the state-owned Grain Trade Company. The official added that the company is building 190 new bunkers to increase grain storage capacity by 1.5 million tons.  

On May 29, news reports pointed to further improvement in the value of the Iraqi dinar against the U.S. dollar. As of market closure on Thursday, the exchange rate on the parallel market was around IQD 1,400 to $1 (compared to IQD 1,450 to $1 four weeks ago). The dinar’s value against the dollar has been gradually improving in recent weeks and months, after starting 2025 at around IQD 1,500 to $1. 

Sources cited in this section include: INA, ISHM archive, UTV, The National, Reliefweb, Baghdad Today.

Derived from firsthand accounts and Iraq-based Arabic and Kurdish news sources, the Iraq Security and Humanitarian Monitor is a free publication of the Enabling Peace in Iraq Center.

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