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Iraq under new Prime Minister Al Zaidi faces a dual crisis: a collapsing oil export model due to Strait of Hormuz risks and U.S. sanctions on Iranian-linked sales, while security fractures deepen with revelations of Israeli bases and militia drone attacks from Iraqi soil.
May 2026
Week of May 25, compared to 12-week average
Iraq's oil-dependent economy is under severe strain as exports through the Strait of Hormuz face disruption. The government cut crude prices by over $30 a barrel to attract tanker operators willing to transit the strait, while the U.S. sanctioned an Iraqi official for allegedly aiding Iranian oil sales. Alternative export routes via UAE pipelines are being explored, but summer blackouts loom.
Prime Minister Al Zaidi consolidated power by ordering a body to oversee contracts and recover public funds, and declared that weapons belong only to the state after Moqtada Al Sadr's decision to integrate an armed faction. He faces militia violence and U.S. support, while offering to mediate between Iran and the U.S. Kata'ib Hezbollah warned foreign envoys against interference.
Iraq's sovereignty is undermined by revelations that Israel operated two secret bases in the country during the Iran war, and by a drone strike on the UAE's Barakah nuclear plant launched from Iraqi territory. Moqtada Al Sadr's integration of an armed faction into state forces signals a shift, while ISIS-linked women continue to return to Australia.
Regional war has silenced Iraq's holy cities, with no pilgrims reported, while environmental shifts show both revival and threat: the Euphrates reached highest levels in years and marshes revive, but the 'devil's trumpet' plant harms crops. A teenager was killed for refusing an arranged marriage, and ISIS women return amid slavery allegations.