Dear Readers,
Iraq is at an inflection point — and for German and international businesses, the opportunities are real and growing. As Delegate of AHK Iraq, it is my privilege to bring you this Q2 2026 edition of our Business Newsletter, where we translate market developments into actionable insights for your business.
From energy and infrastructure to manufacturing and technology, Iraq's market is opening up in ways that reward early movers who are well-informed and well-connected. That is precisely what this newsletter is designed to support.
I warmly invite you to engage with our network, share your feedback, and reach out to the AHK Iraq team directly — we are here to help you navigate this market with confidence.
With best regards,
Dr. Martin Henkelmann
Delegate, AHK Iraq
I. The Strait of Hormuz Crisis – Context for Iraq's Q2 Economy
Much of the economic disruption described throughout this edition traces back to a single event: the effective closure of the Strait of Hormuz. Following the outbreak of the US-Israel war against Iran on 28 February 2026, shipping traffic through the strait — through which roughly a 1/5 of the world's seaborne oil trade normally passes — was largely blocked, as Iranian warnings and attacks on vessels prompted shipping firms to suspend operations. The consequences for Iraq were severe and immediate: with the overwhelming majority of its crude exports and most of its imports routed through the strait, oil revenues collapsed, the local economy contracted sharply, and the government turned to alternative export routes such as the Kirkuk-Ceyhan pipeline.
The situation began to ease in mid-June. The US and Iran signed a memorandum of understanding calling for the full reopening of the Strait without tolls for at least 60 days, and oil prices fell below USD 80 per barrel as traders anticipated restored supply. However, normalisation is proving to be a gradual process rather than an immediate switch. As of late June, the reopening was advancing, and the war-risk premium had largely unwound, with Brent returning to around its pre-war level — but Iran's Revolutionary Guard re-declared route-control authority; the central channel remained mined. The International Maritime Organization began evacuating thousands of stranded seafarers. As one analyst noted, in practice, it is shipping and insurance companies — not governments — that will determine when the strait is genuinely "open."
What does this mean for German companies?
The crisis has exposed the structural vulnerability of routing nearly all Iraqi trade through a single maritime corridor. For businesses with exposure to Iraq, the near-term implications include continued volatility in shipping costs and insurance premiums, potential delays at southern ports, and a strong case for building route diversification and contractual flexibility into supply-chain planning. The episode is also likely to accelerate Iraq's strategic interest in alternative corridors — the Ceyhan pipeline, the proposed Basra-Haditha line (a strategic crude-oil pipeline project), and the Development Road (a planned road-and-rail trade corridor linking Iraq to Turkey and Europe) — each of which may open longer-term opportunities.
II. Economic Developments and Industry Insights – AHK World Business Outlook Iraq (Spring 2026)
As part of the AHK World Business Outlook, AHK Iraq surveyed German companies active in Iraq between March and April 2026. The results point to a marked cooling in business sentiment since Autumn 2025, driven primarily by regional geopolitical tensions and supply-chain disruptions. Across nearly all indicators, net scores declined sharply — though hiring intentions remain in positive territory, suggesting that companies are pausing investment rather than exiting the market.
Net scores reflect the balance of positive over negative responses on a scale from –100 to +100. A positive score indicates that more respondents reported favourable conditions than unfavourable ones.
Key observations:
- Current business situation and investment intentions recorded the steepest falls (both –76 points), with more than half of companies postponing or reducing planned capital expenditure.
- The local economic outlook has turned negative for the first time, reflecting the direct impact of regional conflict and logistics disruption on confidence in Iraq's near-term trajectory.
- Employment prospects, while also down significantly, remain the most resilient indicator at +14 — signalling that companies are maintaining their workforce even as they scale back expansion plans.
The overall picture is one of cautious resilience: companies are not withdrawing from the Iraqi market, but they are recalibrating. Capital expenditure is being deferred, expansion plans revised, and decision timelines extended. For businesses evaluating their Iraq exposure, the data suggest a wait-and-see posture on investment, paired with continued operational commitment. AHK Iraq will track whether this sentiment stabilises or deteriorates further in the Autumn 2026 survey.
Download the Full Report
III. Tenders
Iraq continues to channel significant public investment into infrastructure, energy, and industrial development as part of its broader economic diversification agenda. International companies with relevant capabilities are increasingly well-positioned to participate, as both federal ministries and the National Investment Commission regularly publish open tenders across multiple sectors.
The two primary official sources for tender announcements are the Ministry of Planning (MoP) and the National Investment Commission (NIC). For broader market coverage, the third-party aggregator IQ Tenders consolidates listings from multiple sources and can serve as a useful starting point for initial screening.
Official Government Portals
- Project Tenders Iraq – Ministry of Planning (MoP)
- Announcements & Tenders – National Investment Commission (NIC)
Third-Party Aggregator
For support in identifying, evaluating, or responding to specific tenders, please contact the AHK Iraq team directly.
IV. Press Release
27 April 2026 – Ali al-Zaidi nominated and sworn in as Prime Minister
On 27 April 2026, the Coordination Framework nominated businessman Ali al-Zaidi as its consensus candidate for Prime Minister, after months of political deadlock. President Nizar Amedi formally tasked him with forming a government on the same day. On 14 May 2026, parliament granted his government a vote of confidence and approved 14 ministers — though key portfolios, including Interior and Defence, remain unfilled, as Iraq's main political blocs — the Shia Coordination Framework together with Sunni and Kurdish parties — continue to negotiate their allocation. The official handover ceremony took place on 16 May 2026. At 41, al-Zaidi is the youngest Prime Minister in Iraq's modern history.
Sources: Al Jazeera
11 April 2026 – Nizar Amedi elected as Iraq's new President
On 11 April 2026, Iraq's Council of Representatives elected Nizar Amedi as the country's new President, ending a five-month political deadlock that had followed the November 2025 parliamentary elections. Nominated by the Patriotic Union of Kurdistan (PUK), Amedi secured 227 votes in a second round of voting, comfortably defeating his closest rival. A career public servant and former Minister of Environment, he previously served as a senior aide to two former Iraqi presidents. At 58, he brings decades of experience navigating Iraq's complex constitutional and political landscape. Under Iraq's power-sharing system, the presidency is a largely ceremonial role traditionally held by a Kurdish politician.
Sources: CNBC
2 June 2026 – Iraq Moves to Triple Oil Exports via Kirkuk-Ceyhan Pipeline
Faced with the near-total disruption of its southern oil export routes through the Strait of Hormuz, Iraq is moving decisively to reroute exports via its northern corridor. The Iraqi cabinet approved a plan to increase throughput on the Kirkuk-Ceyhan pipeline — running from the Kurdistan Region and Kirkuk oil fields to the Turkish Mediterranean port of Ceyhan — from 220,000 to 770,000 barrels per day within two and a half months. Prior to the regional conflict, approximately 96–97% of Iraq's crude exports transited the Strait of Hormuz, making the current disruption an acute fiscal emergency. The pivot to the Ceyhan route marks a significant strategic shift and has direct implications for logistics, contracting, and project planning for international companies operating in northern Iraq and the Kurdistan Region.
Source: Bloomberg
5 June 2026 – IMF Projects 6.8% Economic Contraction for Iraq in 2026
The International Monetary Fund's Regional Economic Outlook projects a significant contraction of Iraq's GDP by 6.8% in 2026, compared to a 0.4% decline in 2025 — placing Iraq among the weakest-performing economies in the Middle East and North Africa region. The downward revision represents a shift of nearly 10.4 percentage points from the IMF's October 2025 forecast and reflects the direct impact of regional geopolitical instability, Strait of Hormuz disruptions, and supply-chain pressures on Iraq's oil-dependent economy. Looking beyond 2026, the IMF projects a robust rebound of 11.3% growth for 2027, contingent on a stabilisation of regional security conditions and a recovery in oil export volumes. For German companies active in Iraq, the contraction underscores the importance of scenario planning and contractual risk management for the near term, while the projected recovery signals continued long-term market relevance.
Sources: Shafaq News
5 June 2026 – World Bank Approves USD 900 Million Road Infrastructure Package for Iraq
The World Bank Board of Executive Directors approved a USD 900 million financing package for the Iraq Transport Economic Corridors (ITREC) project, focused on rehabilitating and upgrading Iraq's strategic road network. The project will prioritise two key axes: a north-south corridor linking Baghdad to the Turkish border via Expressway 2 (E2), and an east-west corridor along Expressway 1 (E1) connecting Baghdad with Syria and Jordan. The investment is expected to reduce transport costs, improve freight efficiency, strengthen cross-border connectivity, and benefit approximately 7.9 million people living along the upgraded routes. For German companies in construction, engineering, logistics, and transport technology, the ITREC project represents a concrete and near-term opportunity for involvement — either as contractors, subcontractors, or technology suppliers under the programme's international procurement framework.
Source: World Bank
8 June 2026 – 2026/2027 Federal Budget
Iraq's fiscal outlook in 2026 spans two distinct time horizons: an unresolved near-term budget situation and a longer-term reform agenda.
Near-term horizon (2026): Iraq enters Q3 2026 without an approved federal budget. Following the expiry of the 2023–2025 three-year budget framework and the political deadlock surrounding government formation, parliament has not yet voted on a 2026 budget law. In the interim, the government is operating under a one-twelfth spending mechanism, releasing monthly allocations equivalent to one-twelfth of the previous year's expenditures, in line with the Federal Financial Management Law No. 6 of 2019. The vote on a formal 2026 budget remains tied to the new government submitting its programme to parliament — a step now expected following Prime Minister al-Zaidi's swearing-in in May 2026.
Longer-term horizon (2027 and beyond): Planning for the 2027 federal budget is already underway, with a stated focus on long-term fiscal sustainability and structural economic reform. Key priorities include protecting social spending, reducing dependence on oil revenues, advancing government digitalisation, and improving the economy's resilience to external shocks. The budget framework is being aligned with Iraq Vision 2035, Iraq's long-term strategy for building a diversified and sustainable economy.
Sources: Iraqi News / Zawya / Channel 8
June 2026 2 - Meeting with Iraq's Deputy Minister of Trade and FICC President
AHK Iraq met with Dr. Sattar Al-Jaberi, Deputy Minister of Trade of Iraq, and Mr. Amer Al-Fahdawi, President of the Federation of Iraqi Chambers of Commerce (FICC), to discuss opportunities for strengthening German-Iraqi economic cooperation and enhancing private sector engagement.
The meeting also provided an opportunity to congratulate Mr. Al-Fahdawi on his recent appointment as President of the FICC. Discussions focused on expanding collaboration between German and Iraqi businesses and reinforcing the role of institutional partnerships in supporting trade, investment, and sustainable economic development.
June 2026 11 - Consulting Days at the Außenwirtschaftsforum Hessen
AHK Iraq participated in the Außenwirtschaftsforum Hessen in Frankfurt, where it held a series of consulting meetings with German companies interested in the Iraqi market. The discussions focused on market entry opportunities, current economic developments, and the support services available to companies seeking to establish or expand their business activities in Iraq.
June 2026 19 - Iraq Roundtable in Berlin
AHK Iraq participated in the Iraq Roundtable in Berlin, organized by the Expert Forum Iraq, bringing together representatives from government, business, and industry to discuss current economic developments and business opportunities in Iraq. The event brought together perspectives on strengthening German-Iraqi economic cooperation and deepening engagement between the two business communities.
VII. Policy & Regulatory Updates
- April 2026 6 – Iraq moves to unify customs procedures nationwide, including the Kurdistan Region: At a session of the Ministerial Council for the Economy chaired by Foreign Minister Fuad Hussein, Iraq agreed to standardise customs procedures across all border crossings — including those in the Kurdistan Region — as part of broader efforts to improve trade management and increase public revenues. The Council agreed to unify customs policy nationwide, covering tariffs and measures to protect domestic products, to roll out the ASYCUDA electronic customs system at Kurdistan Region crossings, and to strengthen coordination between federal and regional authorities to standardise procedures and improve transparency. A joint technical team from the federal Ministry of Finance and the Kurdistan Region's General Directorate of Customs was tasked with aligning systems and processes. For German companies, the move is significant: importing into the Kurdistan Region has historically followed different rules than the federal regions, and a unified framework means that tariffs, valuation methods, and clearance procedures will increasingly be the same whether goods arrive in Basra, Baghdad, or Erbil — reducing complexity but requiring updated compliance planning.
Source: Ministerial Council for the Economy
VIII. Trade Fair Finder
This section highlights key trade fairs relevant to companies active in the Iraqi market. For a comprehensive and regularly updated overview of upcoming fairs, please consult the AUMA FairFinder, which lists international trade fairs by country, sector, and date.
For Iraqi exhibitors: As the official partner of Deutsche Messe and Koelnmesse, AHK Iraq supports Iraqi companies wishing to showcase their products at trade fairs in Germany. If you are an Iraqi exhibitor seeking more information, please contact us — we are happy to provide assistance and guidance throughout the process.
IX. DEinternational Services
Navigating a new market can be challenging — but you don't have to do it alone. Through its service entity, DEinternational, AHK Iraq offers German and international companies a range of tailored consultancy services to support successful market entry and growth in Iraq:
- Initial Consultation – a first orientation on opportunities, risks, and entry strategies for the Iraqi market.
- Contact Finder – identification and qualification of potential business partners, suppliers, or customers.
- Market Insight Reports – tailored research and analysis on sectors, competitors, and regulatory conditions.
- Trade Fair Representation in Iraq – on-the-ground representation of your company at trade fairs when you cannot attend in person.
Additional customised services are available on request. Please contact us to discuss how we can support your business in Iraq.
Disclaimer: The information provided in this newsletter is for general informational purposes only and does not constitute legal, tax, financial, or investment advice. While AHK Iraq endeavours to ensure that the content is accurate and up to date, it makes no guarantee as to its correctness, completeness, or timeliness, and accepts no liability for any actions taken on the basis of this information. This newsletter may contain links to external websites; AHK Iraq has no control over their content and accepts no responsibility for it. For advice tailored to your specific situation, please consult a qualified professional.
