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Welcome to This Week in Iraq, your one-stop source for all of the most important Iraq news, curated by the editors of Iraq Oil Report. To sign up and receive this free newsletter in your inbox every week click here.
Top Stories
Iraq's domestic crude oil demand is increasing steadily as the country's largest refinery has staged a major comeback. The Baiji refinery had been taken entirely offline and largely destroyed during the war against the Islamic State militant group, but the Oil Ministry has been making efforts to bring it back for about eight years. Now its total processing capacity is higher than ever. On the back of this success, nationwide refining capacity now stands at more than 1.5 million barrels per day (bpd), according to an Iraq Oil Report analysis based on data gathered from Oil Ministry publications and documents, industry officials, and more than half a dozen Iraqi officials working at the regional state-run companies overseeing the country's refineries — a jump of more than 250,000 bpd since 2024 and 500,000 bpd since 2022. Actual refinery runs have also risen at a similar pace. For a detailed look at Iraq's refinery portfolio, read the story on Iraq Oil Report. And for updates on refineries in Basra, Missan, and Dhi Qar, read Iraq Oil Report's interview with Muntaser Kadhim Haloub, the deputy director general for technical affairs at the state-run South Refineries Company.
Chevron has signed multiple memoranda of understanding for oil fields across Iraq, including West Qurna 2, the Nassiriya field and four nearby exploration blocks in Dhi Qar province, and the Balad field in Salahaddin province, according to an Oil Ministry statement. The Feb. 23 signing ceremony was attended by senior U.S. officials, including Tom Barrack, who appears to have taken over special envoy duties from Mark Savaya. Chevron emerged as the leading contender to take over the West Qurna 2 field at the end of 2025, as Lukoil was pressured to leave the project due to U.S. sanctions against Russia. Iraq's state-run Basra Oil Company has temporarily assumed operatorship of the field since Lukoil's force majeure, and the new MOU now gives Chevron an exclusive one-year window to negotiate a new contract once Lukoil officially exits the project. Chevron had previously signed a non-binding MOU for the Dhi Qar exploration blocks and the Balad field in August 2025. No binding deals are likely to be signed until a new government is seated.
Nouri al-Maliki appears to be facing an increasingly difficult path to return as prime minister, as political power brokers struggle to navigate the disarray caused by U.S. interventions in Iraq's government formation process. After U.S. President Donald Trump issued a strong statement against Maliki's return late last month, the Coordination Framework — a group of Shia Islamist parties that forms the backbone of the current government — has been divided over how to proceed, with some parties advocating to replace him as their nominee while others are reluctant to abandon his candidacy even as they fail to find a way forward. While the official, public position of the Coordination Framework has not changed, the internal disagreements have effectively stalled the process by which Maliki's nomination would be formalized in Parliament. Read the full story on Iraq Oil Report.
Interview Spotlight
Ali Nazar al-Shatari, the head of Iraq's oil marketing company, SOMO, dismissed reports that U.S. sanctions are threatening Iraqi oil exports. In an interview with Iraq24, Shatari said the U.S. Treasury considers SOMO’s documentation and oversight procedures to be robust. He also addressed several other sets of topics:
US-Iran tensions and market impact
- Price Volatility: Shatari said speculators frequently exploit tensions to drive price changes that may not reflect actual supply and demand, including disputes between the U.S. and Iran.
- The Strait of Hormuz: its closure would halt the export of approximately 11 to 12 million bpd from the Gulf, and severely impact Iraq, Saudi Arabia, and the Asian market, all of which rely on this route.
- Electronic Spoofing: some tankers use electronic jamming to appear as though they are in Iraqi waters when they are not.
Possible sanctions and SOMO’s protective measures
- Tracking Systems: To protect Iraq’s "main artery" of revenue, SOMO uses a paid tracking program to monitor tanker histories. They review at least the last 50 trips of any vessel to ensure it has not participated in smuggling, mixing, or suspicious activities.
- Tanker Classification: SOMO categorizes vessels into three tiers to mitigate risk.
- Green: clean tankers that SOMO directly deals with.
- Yellow/Orange: tankers under review or those working with other ministries (e.g., Industry) that are verified as clean but not currently contracted by SOMO.
- Red: tankers that are high-risk or already on US, international, or European sanction lists.
- Verification with the U.S.: SOMO has shared its original documentation, including specific security features like unique inks, stamps, and signatures, with the U.S. side to help them distinguish authentic Iraqi oil documents from forgeries.
Strategic shifts to mitigate geopolitical pressure
- Diversifying export routes: in addition to restarting the Iraq-Turkey Pipeline to Ceyhan, the ministry is pursuing a potential restart of the Iraq-Syria pipeline to Baniyas and Tripoli, and a pipeline to Aqaba in Jordan. The ministry is also exploring a potential pipeline to Oman to establish strategic storage and trading hub outside the Gulf bottleneck.
- Price Hedging: since mid-2022, SOMO has been in discussions with major financial institutions to explore price hedging. This strategy aims to guarantee the minimum revenue required by the national budget even if global oil prices crash due to geopolitical events.
Region
Iraq says it will send a delegation to Iran in an attempt to restart gas imports and bring power generation back up. Iran stopped natural gas supplies in December, citing a need to for its own power generation during high winter demand. The Electricity Ministry announced it will send a delegation to Tehran soon to discuss resuming gas imports, amid broader concerns about the summer peak demand season, Attaqa reports. Iraq's Electricity Ministry says summer demand could hit 60,000 MW this year, driven by higher temperatures and increased consumption, Iraqi News reports.
The long-delayed electrical interconnection project with the Gulf Cooperation Council (GCC) grid is scheduled to begin operating on April 1, Alssaa Network reports. The initial phase is expected to supply roughly 500 megawatts to southern Iraq. The project, which links Iraq’s grid to the GCC Interconnection Authority network via Kuwait, is part of Baghdad’s broader effort to diversify electricity imports and reduce reliance on Iranian power supplies.
Egypt has offered to mediate as the Iraq–Kuwait maritime border dispute re-emerges at the UN. IraqiNews reports that Egypt is offering to assist Iraq and Kuwait in resolving their maritime border disagreement through dialogue and international law, after Iraq submitted updated coordinates and maps to the United Nations. The coverage frames Cairo’s position as encouraging a diplomatic settlement while emphasizing sovereignty and legal process, reflecting a wider regional sensitivity around Gulf maritime boundaries.
Analysis & Commentary
Iraqi economic analyst Nabil al-Marsoumi comments on the significance of Chevron's return to Iraq. “This shift may indicate Iraq’s move towards the West, as American and European investments in the energy sector contribute to steering Baghdad’s interests away from Moscow, Beijing, and Tehran, and the desire to counterbalance the enormous Chinese influence in Iraq’s oil and gas sector," Marsoumi said, according to UltraIraq. Marsoumi notes Chevron's presence could also help reduce the likelihood of Washington aggressively enforcing Iran sanctions against Iraq.
Iraq’s next prime minister will be “held hostage” by the U.S.-Iran standoff, according to Shafaq News. Iraq’s prolonged government formation process has become entangled in broader U.S.-Iran strategic tensions, with political leaders in Baghdad reportedly waiting on cues from both Washington and Tehran to influence the choice of the next prime minister. Analysts told Shafaq News that while Washington has openly rejected Nouri al-Maliki’s potential return as prime minister, viewing him as aligned with Iran, Iranian influence has weakened. The standoff between the two external powers is described as shaping internal negotiations, constraining political maneuvering within the Shiite Coordination Framework and affecting decision-making timelines in Baghdad.
The Center for Strategic and International Studies (CSIS) has mapped the ways a U.S. strike on Iran could affect regional energy flows and markets in a new report. The commentary notes that in past, short confrontations, such as last summer's attacks on Iran, energy supplies were not significantly disrupted, but a new round of fighting could lead to more serious threats to oil shipments and infrastructure. Iran could potentially use fast-attack craft, drones, anti-ship missiles, or naval mines to target tankers or disrupt shipping in the Strait of Hormuz.
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