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Iraq is caught in a regional security crisis triggered by the Iran-Israel confrontation, forcing airspace closures and drawing threats from armed groups, while its government simultaneously pursues major energy deals and faces diplomatic isolation over a maritime dispute with Kuwait.
February 2026
Week of Feb 23, compared to 12-week average
Iraq's energy sector is undergoing a significant realignment with major international deals, while infrastructure faces disruption from regional conflict. Chevron is moving to acquire the West Qurna 2 oilfield from Lukoil, and a Turkish-BP partnership is reshaping power dynamics in the north. However, gas exports from the Khor Mor field to Kurdistan have been halted, and airspace closures have disrupted aviation.
Iraq's government is diplomatically isolated over its maritime border claim against Kuwait, with Gulf states rallying behind Kuwait. Concurrently, it is a venue for high-stakes diplomacy, with its foreign minister discussing Iran-US nuclear talks and a US envoy meeting ex-prime minister Maliki. Tensions with Turkey also persist over PKK remarks.
Iraq's security is dominated by the spillover from the Iran-Israel confrontation, forcing the closure of its airspace due to overflying missiles. Armed groups have threatened US bases, and airstrikes have killed people in Jurf al-Sakhar and Babil. Germany has withdrawn troops, citing regional tensions, while the US has built up air power.
The dominant societal tension revolves around the unresolved legacy of ISIS, with former child soldiers seeking repatriation and weather delaying the transfer of detainees from Syria to Iraq. Kurdish Iranian groups in Iraq are also watching for political change in Iran.