Analysis

Iraq's Ministry of Finance monthly spending data reveal significant disparities across governorates that extend beyond the Kurdistan Region, affecting ministries, services and governorates nationwide. Operational and investment allocations vary widely from southern to central Iraq, while Kurdistan Region governorates and disputed areas such as Kirkuk received no funding from 2015 to 2025.

Both the ceasefire and the negotiations between the Syrian Democratic Forces (SDF) and the interim Syrian government have remained fragile. However, the most recent agreement between the two sides—reached on the 27th of January, 2026, and announced publicly on the 30th of the month—appears to represent an important turning point. The agreement has taken shape under the combined influence of developments on the ground and the broader political-military dynamics unfolding across the Middle East

Data published by Iraq’s Ministry of Finance provides an official view of how the country’s economy has been managed over the past decade, with one defining feature standing out clearly: the sustained and rapid expansion of public expenditure. This report is the first installment of a three-part series examining Iraq’s economic trajectory, based on the Rudaw Research Center’s monthly revenue and public expenditure dashboard covering all state institutions from 2015 to 2025.

In late 2025 and early 2026, Iran entered one of the most critical phases in its more than 46-year history since the establishment of the Islamic Republic. A new wave of protests has emerged, spreading to approximately 250 locations across 27 provinces. Although the number of participants appears lower than in previous protest movements, the speed and geographic breadth of their spread, combined with the severe economic pressure faced by ordinary citizens, make this wave particularly significant. However, economic hardship alone does not fully explain the current unrest. Broader structural and political factors are also at play, including declining public trust in the political system during what many perceive as a transitional period, as well as the impact of external political and military developments on Iran’s internal dynamics. The reimposition and tightening of international sanctions, statements by U.S. President Donald Trump regarding the possibility of intervention should protesters be killed, the growing risk of a renewed military confrontation with Israel, and the capture of the Venezuelan President, Nicolás Maduro, have all contributed, directly or indirectly, to shaping the current protest environment.

More than three months ago, a trilateral agreement was signed for exporting oil from Kurdistan Region fields through pipelines and selling it to global markets. According to the penultimate clause of the agreement, " The agreement will be effective for 30 days from the date of signing and will automatically extend until December 31, 2025. The parties can agree to extend the agreement for a longer period or terminate it prematurely."

In his most recent interview with the Iraqi News Agency (INA), the Prime Minister of Iraq presented a set of new economic figures that carry significant implications for the country’s financial outlook. However, these figures diverge markedly from the data published in official reports issued by the Ministry of Finance, the Central Bank of Iraq, and various international institutions.

Taken together, these developments highlight the diversification of Iraq's investment environment and the country's opening to the world's largest energy companies. However, the case of the West Qurna-2 oil field reveals a major structural weakness in Iraq's energy sector: its vulnerability to shifts in the relationships among global powers. It raises a critical question: if, one day, the United States were to impose sanctions on China and its energy companies, how would Iraq continue to produce oil and finance the state, given that around 90 per cent of government revenue still comes from oil exports?

The rocket attack on the Khor Mor gas field on the night of 26 November 2025 caused the explosion of the facility’s newest 65,000-barrel liquefied petroleum gas (LPG) storage tank and brought to a halt the flow of natural gas that generates nearly 80 percent of the Kurdistan Region’s electricity, in addition to supplying 1,200 megawatts of power to Iraq. The damage extends far beyond the millions of dollars lost in the destruction of the facility or the widespread blackout across the Kurdistan Region. This incident will have both immediate and long-term consequences for the oil and gas sectors of the Kurdistan Region and Iraq more broadly.

Since the summer of 2022, the Khor MOR gas field has been hit nine times by drones or rockets. The most recent strike, carried out last night, appears to be the most significant yet, plunging parts of the Kurdistan Region into darkness. The persistence of these attacks over the past three years, despite shifts in tactics and delivery methods, suggests that the issue extends far beyond a localized dispute or an internal crisis within the Kurdistan Region. Rather, it points to a broader strategic calculus.

Recent discussions about a supposed shortage of dinars—affecting the November salaries in Iraq’s central and southern governorates and the September salaries in the Kurdistan Region—require clarification. The facts become clear when examining the figures from the Central Bank, the Ministry of Finance, and the Ministry of Oil.

Iraq’s contentious 2025 elections unfolded amid deep internal fractures—across ethnic, sectarian, and political lines—and within a broader regional environment marked by heightened geopolitical tension. The preliminary results of the political balance translate into a new configuration that may include the following

For more than a decade, Syria’s Kurdish regions have faced a series of profound shifts that have reshaped their economic, political, and social foundations. Although the Ba'ath Party’s longstanding policies of marginalization and impoverishment had already left deep structural challenges, the changes that followed the 2011 uprising and the transformation of local governance introduced a new trajectory. These dynamics intensified further at the end of 2024 with the fall of the Syrian regime. Yet instead of ushering in a period of stability and economic recovery, the region entered a new wave of economic collapse and declining living standards. This has placed Kurdish families before a serious test of survival, forcing them to adapt to a volatile environment marked by uncertainty and multiple possible outcomes.

<!-- wp:paragraph --> <p>One year after the launch of the Runaki Project—an ambitious, region-wide initiative designed to provide 24-hour, uninterrupted electricity across the Kurdistan Region of Iraq—approximately 70 percent of the region’s population is now receiving continuous power through the program.</p> <!-- /wp:paragraph --> <!-- wp:paragraph --> <p>The Runaki Project marks a significant milestone in the Kurdistan Regional Government’s efforts to modernize the energy sector, reduce dependence on small private diesel generators, and minimize environmental pollution resulting from fragmented power production.</p> <!-- /wp:paragraph -->

On September 27, 2025, the pipeline for exporting oil from the Kurdistan Region to European, Asian, and U.S. markets via the Port of Ceyhan was reopened. Over the past month, an average of 188,221 barrels per day of oil from Kurdistan Region fields reached buyers.

This reassurance from the Central Bank and the Prime Minister of Iraq comes at a time when, a decade and a half ago, Iraq’s external debt stood at $60.9 billion, and its domestic debt was $9.9 billion. By June 31, 2025, however, domestic debt had risen to $67.2 billion, while external debt had declined to $14.45 billion. These shifts and reversals are noteworthy and highlight several important aspects of Iraq’s economy. The key question now is whether the issue of government debt has become part of the election campaign rhetoric or if it represents a genuine threat to the country’s financial and economic stability in the future.

Exactly one year ago today, on a day much like this one, Devlet Bahçeli, the leader of Türkiye’s Nationalist Movement Party (MHP), delivered a speech in parliament that marked the beginning of a new phase in the ongoing conflict between the PKK and the state, a process that continues to this day.

On November 11, 2025, citizens of Iraq and the Kurdistan Region will head to the polls to elect members for the sixth parliamentary term. The annual cost of maintaining this parliament is approaching half a billion U.S. dollars.

These days, a range of phrases are being made about the upcoming elections. Nouri al-Maliki has declared that abstaining from participation is akin to surrendering to “Satan”, while Hadi al-Amiri has described it as a “battle for survival.” Qais al-Khazali has warned of a “dangerous project for Iraq,” urging people to participate—directly opposing Muqtada al-Sadr’s call for a boycott. However, Mohammed Shia al-Sudani has adopted a different tone, appealing to voters to let him complete his “unfinished work.” Ultimately, these slogans all share the same goal: to draw people to the ballot boxes—one of the greatest challenges of this election. Yet that is not the only concern. The central question is Iraq is heading toward elections amid a state of strategic uncertainty.

Wood Mackenzie has been tasked with reviewing production costs, investment levels, and profit margins per barrel of oil for international companies operating in the Kurdistan Region. Based on this review, Baghdad will allocate the companies’ financial entitlements for both the current and future phases.

On the morning of September 27, 2025, Kurdistan Region oil was exported via pipeline to the Ceyhan port. This tripartite agreement will directly impact the entire energy sector in both Iraq and the Kurdistan Region, even as three unresolved files remain suspended for 2026.

According to the Global Inequality Dashboard, which compiles data from 110 countries worldwide, Iraq ranks among the most unequal nations in terms of income and wealth distribution. The top 1% of the population earns three times more than the 45%, highlighting deep structural imbalances. A key driver of this inequality is the public sector, particularly in the way salaries are allocated.