Port city of southern Iraq, capital of Basra Governorate
Iraq’s prime minister travels to Washington to deepen economic ties as the Strait of Hormuz remains closed and fighting between the US and Iran intensifies. Oil output, IMF talks, and potential US investment are on the table while Iran-backed groups push back against disarmament. Diplomatic prospects hinge on stabilizing energy flows and expanding state control over weapons.
The Strait of Hormuz remains a focal point as renewed US and Iranian strikes have disrupted shipping, pushed oil prices higher, and drawn in regional powers. Oil flows through Hormuz have slowed, tanker traffic is volatile, and regional leaders warn of broader conflict.
The Gulf states are accelerating pipeline projects to bypass Hormuz as Iran blocks the Strait, while existing routes face strain. Several major lines are nearing completion, with Fujairah and Yanbu expanding capacity; Iraq and Turkey explore alternative export routes. Analysts warn the shift could alter global oil flows and prices.
Iraq and Turkiye have renewed efforts to cooperate on energy and transport after the expiry of the 1975 oil-export agreement. Turkiye seeks new routes and expanded export capacity, with talks focusing on an energy framework, water management, security, and regional development.
Airstrikes by US and Saudi forces hit PMF sites in Iraq after attacks on Saudi facilities, while Iran-backed groups and regional rivalries threaten Iraq’s new prime minister’s plan to disarm militias and anchor the state. The broader Strait of Hormuz dynamics and Yemen’s Houthis add layers to the conflict, risking wider regional instability.
Energy majors have reported bumper profits as Middle East conflict drives oil and gas prices higher. ExxonMobil, Chevron, and Shell show sharp year‑over‑year gains amid volatile supply routes, while traders warn against overreliance on geopolitics for long‑term gains.
Iraq and Turkey have extended and refreshed arrangements for the Kirkuk-Ceyhan pipeline, aiming to diversify exports and reduce reliance on Hormuz. A one-year extension is set to keep flows through Ceyhan at about 750,000 barrels per day while broader energy cooperation is pursued. Talks include oil, electricity and water resources, with Ankara signaling a longer-term framework.
Kurdistan authorities have reported Iranian-launched drones struck the private office of KRG Prime Minister Masrour Barzani and the residence of the region's security agency chief on 17 August, with no casualties. The attacks come as Baghdad presses for a September 30 deadline to bring armed factions under state control and as cross-border strikes and US-Saudi operations have raised tensions across Iraq.
President Donald Trump has said he will "pretty soon" declare the Strait of Hormuz to be US territory after defeating Iran, and has touted a US naval blockade. Iran has rejected the claim, saying the strait "will only be closed and opened under Iran's command" and has refused to resume talks while the waterway remains blocked. Mediators continue quiet contact.
The United States has warned of an unprecedented financial offensive against Iran, with Treasury officials and the president signaling tighter enforcement of sanctions. Tehran has warned of an "earthquake-like" retaliation and warned Gulf states against joining. Oil markets are watching, as prices fluctuate amid the standoff.
The Houthis have extended their presence along Yemen’s Red Sea coast, threatening Bab al-Mandeb's vital shipping lane. Iran signals willingness to support talks; the Yemeni government vows a broader offensive to retake captured areas. Global oil markets react as shipping risks rise and regional tensions intensify.