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By John Lee.

Iraq's state-owned Oil Exploration Company and Al-Qarnain Petroleum, a subsidiary of China's ZhenHua Oil, have signed a contract for a two-dimensional seismic survey of the Al-Qarnain (Al-Quraynan) exploration block.

Minister of Oil, Hayan Abdul Ghani, described the block as a promising oil and gas prospect on Iraq's border with Saudi Arabia. According to a press release from the Ministry, ZhenHua secured the rights to develop it under Iraq's fifth supplementary licensing round and will drill four exploration wells; Iraq Business News understands that the rights were granted in the sixth licensing round.

The block falls under the remit of the Midland Oil Company, which has been tasked with following up on the contract's implementation.

Deputy Minister for Extraction Affairs, Bassem Mohammed Khudair, said the deal reflects the Ministry's strategy of supporting national companies, particularly the Oil Exploration Company, in conducting two- and three-dimensional surveys and preparing field studies.

Oil Exploration Company Director General, Osama Raouf, said the survey will cover 2,850 km and is expected to take 223 days. The Al-Qarnain block lies within Najaf Governorate, near the border with Saudi Arabia, and is considered prospective for both oil and gas.

(Source: Ministry of Oil)

By John Lee.

The eight OPEC+ countries, including Iraq, have agreed to the continuing of their phased rollback of 2.2 million bpd in voluntary cuts that began in April.

According to a statement from OPEC, the decision, taken during a virtual meeting on 3rd August, reflects confidence in current oil market fundamentals, including low inventory levels and a stable global economic outlook. The countries reiterated that the adjustment aligns with the 5th December 2024 agreement, which allows for a gradual and flexible return of production, with the ability to pause or reverse adjustments depending on market conditions.

The group also stressed the importance of compensating for any overproduction since January 2024 and confirmed their collective commitment to the Declaration of Cooperation, which is being monitored by the Joint Ministerial Monitoring Committee (JMMC).

Regular monthly reviews will continue, with the next meeting scheduled for 7th September 2025.

Full statement from OPEC:

Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman reaffirm commitment to market stability on current healthy oil market fundamentals and steady global economic outlook and adjust production

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met virtually on 3 August 2025, to review global market conditions and outlook.

In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 547 thousand barrels per day in September 2025 from August 2025 required production level. This is equivalent to four monthly increments as detailed in the table below. The phase-out of the additional voluntary production adjustments may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability.

The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation. The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that were agreed to be monitored by the JMMC during its 53rd meeting held on April 3rd 2024.

They also confirmed their intention to fully compensate for any overproduced volume since January 2024. The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation. The eight countries will meet on September 7, 2025.

(Source: OPEC Secretariat)

By John Lee.

Iraq's Minister of Industry and Minerals, Khaled Battal Al-Najm, chaired a meeting at the Ministry's headquarters to explore a potential partnership agreement with Saudi company Ajyal for the establishment of a petrochemical complex in Basra.

The proposed complex would be built on the site of the State Company for Petrochemical Industries in Basra Province.

During the meeting, participants discussed the terms of the potential partnership and evaluated proposed mechanisms for supplying the project with natural gas, LPG, or alternative energy sources. Technical and legal considerations were also reviewed.

Minister Al-Najm emphasised the strategic importance of the project, describing it as one of the ministry's most promising initiatives to revive and develop Iraq's strategic industries and strengthen the national industrial base. He directed the continuation of negotiations and coordination with relevant parties to secure the necessary requirements to advance the project.

(Source: Ministry of Industry and Minerals)

By John Lee.

The National Investment Commission of Iraq has announced the start of the third round of discussions on the draft Agreement for the Encouragement and Protection of Investments between Iraq and the Czech Republic.

The meetings, held in Prague on 22-23 July, follow the recent visit by Prime Minister Mohammed Shia' Al-Sudani to the Czech Republic and are part of Iraq's efforts to strengthen economic ties and promote mutual investment. The discussions aim to foster a sustainable economic partnership, facilitate technology transfer, create jobs, and support economic development.

The Iraqi delegation was led by NIC Chairman Dr. Haider Muhammad Makiyya, accompanied by the Iraqi negotiation team. The Czech side was led by Martina Matušová, alongside the Czech negotiation team. Iraq's chargé d'affaires in Prague, Mr. Hussein Al-Safi, and his deputy Mr. Samer Jamal also attended.

In his remarks, Dr. Makiya highlighted legislative and procedural reforms that have transformed Iraq's investment environment in recent years, citing a significant rise in both local and foreign investment activity. He officially opened the round of talks, describing the agreement as a milestone in deepening bilateral economic cooperation.

Over two days, the parties engaged in in-depth discussions and advanced the drafting of key provisions. Further rounds of negotiation are planned, with the final version of the agreement to be submitted for formal approval under Iraqi law.

On the second day, Czech Deputy Finance Minister Tomáš welcomed the progress and expressed optimism for future talks. He praised Iraq's recent reforms and confirmed that the Czech Ministry of Finance, through its representative at the OECD, would support efforts to improve Iraq's international investment rating. Iraq's total investment volume has reportedly reached $99 billion.

Tomáš also acknowledged Iraq's recent investment agreements with Qatar, Saudi Arabia, and the UAE as encouraging signs of a stable and investor-friendly environment.

(Source: NIC)

By John Lee.

The Governor of Nineveh, Abdul Qader al-Dakhil, has received Mohammed bin Abdulaziz Al-Ajlan, Chairman of the Saudi Contractors Authority, along with a delegation of Saudi businessmen.

The meeting focused on enhancing cooperation between Iraq and Saudi Arabia in areas of mutual interest. Governor al-Dakhil described the visit as a significant step towards progress and prosperity for Nineveh, noting that the province offers major potential for investment.

He said all available opportunities across various sectors had been presented to the delegation, and pledged to facilitate the entry of Saudi companies and investors into the province.

The Saudi side expressed keen interest in contributing to the reconstruction and development of Mosul, underlining the strong historical and cultural ties between the two countries. They affirmed that Saudi Arabia remains committed to supporting Iraq's development and stability.

(Source: Governorate of Nineveh)

By Ahmed Tabaqchali, Chief Strategist of AFC Iraq Fund.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

"Ten-year Anniversary & a First Visit to Iraq"

The market, as measured by the Rabee Securities U.S. Dollar Equity Index (RSISX USD Index), was down 4.8% for the month and 1.1% for the year, following increases in 44.8% and 97.2% in 2024 and 2023 respectively.

Iraq, then and now

June marks the ten-year anniversary of the AFC Iraq Fund, launched June 26^th, 2015, a year after it was conceived amidst the perfect storm of ISIS's take-over of the city of Mosul, threatening Iraq's breakup, and the crash in oil prices piling on the misery by adding its potential bankruptcy in the process. It seems almost fitting that, yet another perfect storm was marking its ten-year anniversary, in which the Israel-Iran war, brewing for over 18 months, risked igniting a much-feared wider regional war that could have engulfed Iraq. However, unlike then, the storm dissipated in 12 days, or at least for the time being, as both antagonists have sought ways to end it, that seems to have been found through a U.S. mediation made possible by an orchestrated and symbolic attack on an empty U.S. military base and sealed in a theatrical ceasefire announcement.

However, while the risks of the Israel-Iran war erupting once again are real, Iraq and its economy are very different from ten years ago, helping it to weather the war's worst consequences, and to continue with its economic transformation. As discussed here over the last few years, especially in the outlook for 2025 in "What Next After Two Gangbuster Years?" Iraq's economy is undergoing a long-term economic transformation brought on by two key dynamics, which are in the early stages of driving this transformation. The first of which is the cumulative positive effects of the relative stability that the country has enjoyed over the past few years, that provided a stable and predictable macroeconomic framework for businesses to operate in and to plan for capital investments on a scale not seen in the prior decades. While the second is the significant structural fundamental developments accelerating the adoption of banking and bringing about a transformation of the sector and its role in the economy.

Iraq's equity market's performance has mirrored the country's tribulations and its ongoing transformation, in which its pre-ISIS peak in January 2014, was followed by a brutal seven-year bear market with the RSISX USD Index down 25.4% in 2014, 22.7% in 2015, 17.4% in 2016%, 11.8% in 2017, 15.0% in 2018, 1.3% in 2019, and 5.4% in 2020 -for a cumulative decline of 66.6%; followed by a recovery of 21.4% in 2021, a decline of 3.8% in 2022, an increase of 97.2% in 2023, and a further increase of 44.8% in 2024. Underscoring the early stages of the market's recovery, is that the RSISX USD Index only surpassed its 2014 peak over a decade later in October 2024.

Rabee Securities U.S. Dollar Equity Index

(Source: Iraq Stock Exchange, Rabee Securities, AFC Research, monthly data as of June 30^th)

Iraq, as seen through a visitor's eyes

My friend and colleague, Thomas Hugger, CEO of Asia Frontier Capital's (AFC), visited Iraq at the end of May, and with me, embarked on a tour of the country that included business visits to companies such as the Bank of Baghdad (BBOB), and Baghdad Soft Drinks (IBSD), the Iraq Stock Exchange (ISX); cultural tours starting with Baghdad's old districts (Mutanabbi Street, Mustansiriyya Madrasa, Al-Shawaka), and its modern districts; the ancient cities of Babylon, Ctesiphon, Ur; the Marshes; the meeting point of the Tigris and Euphrates rivers forming Shatt Al Arab at Al-Qurnah,; and Iraq's third largest city Basra. This month's report will review our visit to the ISX, the Bank of Baghdad, and focus on one of Iraq's best consumer companies, Baghdad Soft Drinks, and its state-of-the-art production plant, the largest of its kind in the Middle East. Other parts of the tour will feature in the upcoming market reports over the next few months.

This was Thomas' first visit to Iraq, 13 years after AFC started investing in the country. Arriving in Baghdad at 00:30 in the early morning, he was greeted by the driver of "Al-Mosafer Taxi", who took him to a hotel in the neighbourhood of Arasat Al Hindia, in Karada. For Thomas, having just concluded an investor tour in Uzbekistan, arriving on Turkish Airlines from Istanbul, the experience was no different than almost any country among AFC's investable universe that he has travelled to, in such a contrast to the usual Iraq travel advice warnings of the dangers, that are still reflecting Iraq's dark days of conflict that ended years ago. Thomas notes: "Airport immigration was relatively quick and simple: Most foreigners can now apply for an E-visa online and just before going to the immigration counter simply pick up their visa after the helpful staff at the E-visa counter take their mugshots. The airport is still tiny for such an economy, and I assume that a new passenger terminal will be added in the future. I was also impressed by the quality of the brand new three-lane highway leading from the airport to the city centre of Baghdad. Despite the late time of 01:30 am, there was still some traffic. Judging from the style of driving, I would not be surprised that a future Formula-1 driver will be coming soon from Iraq! The emotional and visual highlight though was the crossing of the Tigris River which splits Baghdad into its western part, Karkh, and its eastern part, Rusafa."

The next day, we visited the Iraq Stock Exchange (ISX), situated in the Alwiya area in Karada, in Rusafa, which fortunately happened to be the last trading day of the month, as it allowed us to watch the market's close on the floor of the exchange, after a meeting with the CEO of the Stock Exchange. With the advent of electronic trading in 2009, most investors migrated from watching and trading at the exchange to brokers' offices. However, old habits die hard, and a number of regulars still come to the exchange's floor to meet, gossip, and trade. We chatted with some of them and joined them like two old timers fixated on the trading screens.

At the Iraq Stock Exchange (ISX)

(Source: AFC Research)

May ended on a strong note with heavy activity in some of the leadings stocks such as Asiacell Communications (TASC), Baghdad Soft Drinks (IBSD), Bank of Baghdad (BBOB), Mansour Bank (BMNS), and the National Bank of Iraq (BNOI), in which the five accounted for over 90% of the trading value on the last day of the month -the day ended up among the highest turnover days of the year, at over one and a half times the year to date's average daily trading value. These five companies' market leadership stems from the high quality of their business models, quality of management, and multi-year earnings growth, especially over the last two years, as highlighted last month. All five companies are major constituents of the Rabee Securities U.S. Dollar Equity Index.

Afterwards, we left to visit the Bank of Baghdad, but not before visiting the beautiful Church of Our Lady of Salvation, which is located right across the street from the stock exchange. Our Lady of Salvation is an Assyrian Christian church that survived terrible attacks during Iraq's darkest years of civil war, particularly the attacks in 2004 and 2010. In 2010, there was a twin attack that started at the ISX and was followed by another at the Church with an attack at Sunday Mass. The attackers clearly aimed for maximum damage as Sunday is also the first day of the business week, and so the death toll was 52 worshippers at the church, and four guards at the ISX. In a spirit that is typical of Iraqis, the ISX family went to work the next day as if nothing had happened.

The Church of Our Lady of Salvation

Bank of Baghdad's head office

(Source: AFC Research)

We met Bank of Baghdad's outgoing CEO, who successfully managed the bank's turnaround from mid-2016, and its resumption of growth as highlighted in "Banks and the Predictability of Earnings". After discussing the banking scene in Iraq, he introduced us to the incoming CEO, who shared his strategic plans for the development of the bank in the near future. Afterwards, we had lunch at one of the best grill houses in Iraq, Zarzour on the National Theatre roundabout, and enjoyed a feast of kebab, tikka, liver, hearts and kidneys. Iraqi red meat grills are almost always made of domestic lamb, which are accompanied by high amounts of fat: kebabs have up to 20% of fat content; tikka, liver, hearts and kidneys come with cubes of fat; and for those who want more, restaurants serve skewers of fat cubes as a stand-alone item.  Local sheep breeds are mostly Awassi, followed by Arab and Hamdani sheep, which are broad-tailed breeds with fat tails -they are so prized that successive governments have prohibited their export.

Lunch at Zarour, the National Theatre Roundabout

(Source: AFC Research)

In the evening, we went on a walkabout on one of the liveliest streets in Baghdad, Yarmouk district's "Four Streets", in the Karkh side of Baghdad. Being a Thursday, which is the last of the Iraqi work week, it was full of people, of all walks of life, brimming with energy, movement and whose lively conversations filled the space. Not satisfied with just one grilled meat feast a few hours earlier, we enjoyed another tasty grilled dinner, repeating the same choices, in one of the many restaurants left and right of the buzzing street where entire families walked by or drove in their SUVs, most of which were brand new.

Four Streets, Yarmouk, Karada, Baghdad

(Source: AFC Research)

On Baghdad, Thomas notes: "I noticed that the western part of the city is seeing a lot of construction activity since I assume this part is newer and was therefore less developed a few years ago compared with the eastern part of the city which is very crowded and overbuilt with mostly two to three stories buildings and hosting the older residential and commercial aeras including the historical centre "Olds Rusafa" which is dating back over 1,000 years. I had the feeling that the construction boom and urbanisation of Baghdad were just starting. I was impressed by some huge mixed property developments (residential combined with retail space) -something which could be easily also found in any other place like in the U.A.E., Kuwait, or Qatar. The traffic early in the morning was easy, but later in the day became much more congested, leading to traffic jams into the evening hours (or early morning the next day). It was striking for me that most of the cars seem to be quite new (with the exception of the many yellow taxis) and also that the Dodge "Challenger" is used as a family car in Iraq and seems to be very popular with the local drivers. I was also surprised to learn that the gasoline price in Iraq is about USD 0.65 (850 IQD), which is certainly much cheaper than in Europe, but considerably higher compared with other oil-producing countries."

Construction activity in Baghdad

(Source: AFC Research)

The tour of Iraq's last day ended in Baghdad, with a visit to Baghdad Soft Drinks' (IBSD) head office and its world-class production plant in Al-Za'franiya on the outskirts of Baghdad, which is the largest and best of its kind in the Middle East. IBSD is Iraq's main PepsiCo franchise and has grown organically by expanding the Pepsi Cola line, and strategic acquisitions such as that of the Aquafina (mineral water) licence holder "Ynabee' Al Zawraa Company". As of 2024, IBSD has 15 Pepsi production lines, three Aquafina water production lines, and five juice production lines, with total production growing by about 14% year over year. Complimenting these, were milk products that were introduced in 2024, and a refrigerated hall for milk storage was completed, that while an insignificant part of IBSD's business, nevertheless, Rabee Securities notes that is "... a positive development supporting the expected growth in milk sales" -much like in the rest of the Middle East, fresh milk consumption is on the rise.

IBSD's consistent earnings and revenue growth since 2011, were negatively affected twice in these years. The first business decline was in 2014, following the fall of Mosul and the ensuing conflict, but growth soon resumed in 2015. The second was in 2021-22 when its profit margins took a hit from the significant price rises of commodities, in particular aluminium and sugar, as brought on by the double whammy of the disruptions to supply chains in the wake of the emergence from Covid-19's induced lockdowns, and of the invasion of Ukraine. These higher expenses, while negatively affecting profit margins, were temporary and one-off in nature,  the high year-over-year cost increases moderated significantly and eventually declined; while sales momentum continued to accelerate supported organically by its strong product line-up, as well as by the line-ups from is recent acquisitions -a point made in "Winter Flash Floods" when discussing IBSD, and other top companies following their sharp prices drops in late 2021. The consequences of the cumulative positive effects of the relative stability that the country enjoyed is evident in the acceleration in growth of the last two years. The company's confidence about its future was evident in its latest dividend declaration, at the end of June, in which it increased the cash payout from 0.29 to 0.36 IQD per share, or an increase of 24.2%, resulting in a dividend yield of 7.5%.

IBSD's revenues and earnings margins 2011-2024

(Source: Rabee Securities, company filings, AFC Research, annual data as of 2024)

What is noteworthy, and part of the attractiveness of the Iraq investment story, is that despite the market's strong performance over the last few years, valuation disparities continue to offer investment opportunities.  A case in point is IBSD's valuation disparity with emerging market PepsiCo, and Coca-Cola bottlers (table below) as an example of Iraq's value proposition, and a demonstration of AFC's investment thesis of arbitraging the delta between Iraq's real risk and perceived risk -while a disparity should exist given different market sizes, and other market dynamic differences, yet surely not on such a scale.

Table: Bottler comparisons

(Source: Bloomberg, data as of July 4^th)

On the company, Thomas notes: "We were able to visit the impressive plant factory of Baghdad Soft Drinks in Al-Za'franiya on the outskirts of Baghdad. The plant manager showed us around various buildings where Pepsi, mineral water, and other soft drinks were produced and packaged. The bottling lines did not differ from any soft drink bottling plant in a developed country. Almost all of the machinery was from Germany and hardly any people were doing manual work (except for the forklift drivers moving around the huge piles of bottles or cans) since most of the jobs are computerised or done by robots. Needless to say, the factory was spotlessly clean. We also saw workers from Turkey installing the newest machinery from Germany for the new production lines".

IBSD Production Plant

(Source: AFC Research)

We were taken there by Wassim Al Jzrawy, the CEO of Karmal Brokerage, a colleague and a friend with whom the relationship goes back to 2013, when work first started on the Iraq investment thesis. The visit continued thereafter by touring through Ishtar Sheraton Hotel, sandwiched between the picturesque Tigris River, and "Firdos Square" which became world famous on April 9^th, 2003, when the toppling of Saddam Hussein's statue at that time was shown live on CNN. The hotel is currently undergoing a major refurbishment to meet the strong demand for hotel rooms in Baghdad, as the country's stability, subsequent rebuilding and its booming economy are attracting foreigners, particularly regional businesses investors seeking economic opportunities -or "Go East, young person", a modern day version of "Go West, young man" in the U.S. in the 19^th century, that embodied the massive economic opportunities during the westward expansion in the U.S. So much so, that planes arriving today in Baghdad from Amman, Istanbul, Dubai, or Doha, (some of which have multiple daily flights now), are normally full irrespective of the time of arrival. Increasingly, the inflow of tourists, with the potential economic implications to cater for them, is taking place, as will be covered in the travel reports of our tour of historic Iraq.

View from Ishtar Sheraton Hotel

(Source: AFC Research, left Ishtar Sheraton Hotel, top right Rusafa, bottom right Karkh -both as viewed from the roof of Ishtar Sheraton)

Firdos Square, Karada, Baghdad

(Source: AFC Research, as viewed from the roof of Ishtar Sheraton)

Please click here to download Ahmed Tabaqchali's full report in pdf format.

Mr Tabaqchali (@AMTabaqchali) is the Chief Strategist of the AFC Iraq Fund, and is an experienced capital markets professional with over 25 years' experience in US and MENA markets. He is a Visiting Fellow at the LSE Middle East Centre, Senior Fellow at the Institute of Regional and International Studies (IRIS), and a Senior Non-resident Fellow at the Atlantic Council.

His comments, opinions and analyses are personal views and are intended to be for informational purposes and general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any fund or security or to adopt any investment strategy. It does not constitute legal or tax or investment advice. The information provided in this material is compiled from sources that are believed to be reliable, but no guarantee is made of its correctness, is rendered as at publication date and may change without notice and it is not intended as a complete analysis of every material fact regarding Iraq, the region, market or investment.

By John Lee.

The eight OPEC+ countries, including Iraq, have reaffirmed their coordinated approach to oil market stability and announced a collective production adjustment for August 2025.

In a virtual meeting held on 5 July, the group cited healthy market fundamentals and a stable global economic outlook as the basis for a 548,000 barrels per day increase in production from July levels. This adjustment forms part of a phased rollback of the 2.2 million bpd voluntary cuts initially agreed in April and November 2023, and formally endorsed on 5 December 2024.

The phased increases will unfold over four monthly increments, but the group reserved the right to pause or reverse these measures depending on market developments - a move designed to maintain price and inventory stability.

The countries also committed to accelerating compensation for any overproduction since January 2024 and reiterated full compliance with the Declaration of Cooperation. Compliance and market conditions will be monitored through monthly meetings, with the next scheduled for 3 August 2025 to decide on September output levels.

Full statement from OPEC:

Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman reaffirm commitment to market stability on current healthy oil market fundamentals and steady global economic outlook and adjust production

The eight OPEC+ countries, which previously announced additional voluntary adjustments in April and November 2023, namely Saudi Arabia, Russia, Iraq, UAE, Kuwait, Kazakhstan, Algeria, and Oman met virtually on 5 July 2025, to review global market conditions and outlook.

In view of a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories, and in accordance with the decision agreed upon on 5 December 2024 to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments starting from 1 April 2025, the eight participating countries will implement a production adjustment of 548 thousand barrels per day in August 2025 from July 2025 required production level. This is equivalent to four monthly increments as detailed in the table below. The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability.

The eight OPEC+ countries also noted that this measure will provide an opportunity for the participating countries to accelerate their compensation. The eight countries reiterated their collective commitment to achieve full conformity with the Declaration of Cooperation, including the additional voluntary production adjustments that were agreed to be monitored by the JMMC during its 53rd meeting held on April 3rd 2024.

They also confirmed their intention to fully compensate for any overproduced volume since January 2024. The eight OPEC+ countries will hold monthly meetings to review market conditions, conformity, and compensation. The eight countries will meet on 3 August 2025 to decide on September production levels.

(Source: OPEC Secretariat)

By John Lee.

The opening of new Iraqi TIR corridors has enabled a dramatic reduction in transit times between Europe and the Gulf Cooperation Council (GCC), with journey durations cut from 24 days to just 10, according to a press release from the International Road Transport Union (IRU).

Polish logistics company Milton Group recently completed a round-trip from Poland to the UAE using Iraq's overland TIR transit system.

Carrying yacht engines and spare parts, the truck travelled through Poland, Bulgaria, Türkiye, Iraq, Jordan, and Saudi Arabia before reaching the UAE. The return leg to Poland was also completed overland, maintaining the 10-day timeframe for each direction.

The route passed into Iraq through the Ibrahim Al-Khalil border and exited via Traibeel [Terbil], highlighting Iraq's emergence as a strategic land bridge for trade between Europe and the GCC.

The corridor was made fully operational three months ago, with support from IRU members General Company for Land Transportation (GCLT) and Transforat. It forms part of Iraq's wider ambition to become a regional logistics and trade hub.

Milton Group COO Waleed Kassem called the development "a game changer," noting substantial time savings and enhanced logistics resilience by avoiding congested seaports.

IRU Secretary General Umberto de Pretto praised Iraq's efforts, saying this new connectivity offers "faster and more secure journey times" and greater resilience amid regional uncertainties.

See our Comprehensive Guide to Logistics in Iraq here.

Full statement from the International Road Transport Union (IRU):

From Europe to the GCC: New resilient Iraqi TIR routes slash journey times

With Iraq now fully operational in the TIR system, new faster and more flexible transport routes are opening between Europe and the Gulf Cooperation Council (GCC) region. One example: from Poland to the United Arab Emirates in 10 days, more than halving the traditional 24-day journey.

Polish transport operator the Milton Group has successfully completed a roundtrip journey linking Poland to the GCC entirely by road, via Iraq's newly operational TIR corridors, with a journey time of 10 days compared to 24 days for traditional maritime-based multimodal routes.

The truck, with two drivers, transported yacht engines and spare parts from a Polish factory through the EU to Bulgaria, then through Türkiye, Iraq, Jordan and Saudi Arabia before arriving at the customer's facility in the UAE.

With the support of IRU members GCLT and Transforat and other partners, TIR corridors in Iraq became fully operational three months ago, reinforcing the country's aim to become a strategic regional logistics and trade hub.

Milton, already experienced in multimodal routes between Europe and the Middle East, has been among the first companies to test the new road links. In this case, the trucks entered Iraq from Türkiye via the Ibrahim Al-Khalil border crossing and exited to Jordan via Traibeel.

The results were striking: the full road journey took just 10 days, compared to the 24 days typically required for a multimodal route.

To further enhance the economic viability of the trip, Milton organised a return load from the UAE back to Poland, completing the roundtrip within the same timeframe.

Milton Group Chief Operating Officer Waleed Kassem said, "This new inland TIR transit corridor through Iraq is a game changer for trade between Europe and the Middle East.

"By bypassing congested seaports and offering a fully overland route, we've already reduced our door-to-door transit time from 24 days to just 10, a tremendous improvement.

"We see a huge opportunity in the development of this corridor and are proud to have taken part. At Milton, we look forward to scaling this route into a core pillar of efficient, secure, and time-sensitive logistics to the GCC region."

IRU Secretary General Umberto de Pretto said, "It is truly inspiring to witness the successful launch of this new TIR route through Iraq, seeing the fruits of years of preparations and planning by the Iraqi authorities come to life.

"This marks only the beginning of what promises to be a landmark development for resilient regional connectivity across the Middle East via Iraq, not only providing faster and more secure journey times, but offering significantly more route flexibility and resilience to transport and logistics operators to better manage regional uncertainty."

TIR is the only globally recognised trade facilitation tool, backed by the UN TIR convention and managed by IRU, ensuring the seamless, secure and cost-effective transit of goods across international borders.

(Source: IRU)

By John Lee.

With the TIR system now live in Iraq since April 2025, the Minister of Transport and industry leaders officially marked this milestone this week in Baghdad, signalling a new era for international logistics and trade.

The official launch of the global TIR transit system in Baghdad brought together the public and private sectors to celebrate this momentous achievement. The event was organised under the patronage of H.E. Razzaq Muhaibes Al-Saadawi, Iraq's Minister of Transport, and IRU members General Company for Land Transportation (GCLT) and Transforat.

Managed by the International Road Transport Union (IRU) under a UN mandate, TIR was created in 1949 in post-war Europe to rebuild devastated economies. Its mission then - making cross-border trade efficient and secure - is just as relevant today.

IRU Secretary General Umberto de Pretto, who delivered the keynote speech, said:

"Today, we celebrate the full implementation of the global TIR transit system in the Republic of Iraq. This is a hugely important step taken by the Iraqi government and supported by different stakeholders across the Iraqi administration.

"This new chapter for Iraq will revive and revamp the country's ancient role as a key crossroads in regional and international trade."

"What TIR did 75 years ago for Europe, it has continued to do ever since for Türkiye, the Caucasus, Central Asia, China, Pakistan, Saudi Arabia, the Gulf Cooperation Council (GCC), and now, Iraq."

According to a statement from IRU, demand for TIR has soared in the Middle East, growing over 400 percent between 2023 and 2024.

It adds that, alongside robust security, the system's phenomenal success in the region stems from its efficiency and speed - cutting transport times by up to 92% across GCC borders, for example.

"The success of the first shipments that have already transited your borders under TIR is a noteworthy milestone in this journey and a precursor of future success," said Umberto de Pretto.

Logistics and transport companies are starting TIR operations from departure points such as Mersin, Türkiye, to the GCC via the Iraqi seaport of Umm Qasr. With TIR, this journey is being completed securely in less than a week, compared to a minimum of 14 days via the Red Sea, or up to 26 days if the ship needs to reroute around Africa.

In a fully inland operation, a shipment from Poland to the UAE via Türkiye and Iraq was completed in a record 12 days. According to the operator, a multimodal operation via the Red Sea would have taken at least 21 days.

TIR's electronic pre-declaration system (TIR-EPD) has also been integrated with Iraq's URUK platform, enabling the submission of advance cargo information. Trucks can be closely monitored using GPS tracking throughout their journey, while regular checkpoints ensure cargo and transport security.

"Today, we are not merely launching a transit system. We are celebrating a new chapter in Iraq's journey towards prosperity, connectivity and global relevance. The best chapters of Iraq's history are still to be written," concluded Umberto de Pretto.

In high-level talks, IRU and the Minister of Transport discussed next steps to build on this momentum and support Iraq's Development Road Project. They also explored the opening of new inland customs offices for the clearance of goods transported under TIR.

Umberto de Pretto also held bilateral meetings with Lieutenant General Sami Radi (Advisor to the Prime Minister on ports, customs and transport affairs), Lieutenant General Dr Omar Adnan Al-Waeli (President of Iraq's Border Ports Authority), Thamer Qasim Daoud (Director General of the Iraqi General Customs Authority) and Murtada Karim Al-Shahmani (General Manager and Chairman of the Board of Directors of GCLT).

See our Comprehensive Guide to Logistics in Iraq here.

(Sources: IRU, Ministry of Transport)

By Samer Khraishi, Regional Director for Account Management and Business Development, GCC, Iraq and Jordan at BPC. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.

Modernising Iraq's Financial Infrastructure: The Rise of Digital Payments

Iraq's financial infrastructure has long been in need of significant transformation. With less than 20% of the population owning a bank account, Iraq has one of the lowest financial inclusion rates in the Middle East, paling in comparison to 54% in Saudi Arabia and 69% in the UAE.

In an effort to close this gap, the Iraqi government and financial sector have focused on the adoption of digital payments, with over two trillion Iraqi dinars worth of e-payment transactions recorded in August 2024 alone. The growing shift towards digital-first payment solutions, enabled by partnerships with global fintech partners, is beginning to bridge the shortfall in financial inclusion and power economic growth across Iraq.

Retiring Iraq's Legacy Infrastructure

Iraq's financial sector has faced challenges in expanding its customer base and has experienced limited banking penetration, leaving a large portion of the population unbanked and dependent on informal financial systems. This low access to formal banking services has left many Iraqis unable to take advantage of modern financial products and services, reducing savings rates and fostering financial instability among individuals and businesses.

Further compounding this issue is widespread reliance on outdated regulatory frameworks, disincentivising the adoption of modern financial technology including cloud-based solutions. In addition, Iraq's financial institutions are hampered by legacy systems often unable to support modern solutions, increasing the complexity of implementing faster, more secure digital payment platforms. Replacing legacy infrastructure will allow financial institutions to enhance transaction speed, strengthen fraud prevention efforts, and expand their services in line with international payment standards.

Laying the Foundations for Digital Transformation

Over the past few years, the Iraqi government has taken crucial steps to address these challenges and modernise the financial system of one of the fastest growing economies in the Middle East. The Ministry of Planning, in collaboration with the Central Bank of Iraq (CBI), recently introduced mandates requiring financial institutions to upgrade their digital and technical systems. These upgrades are intended to align Iraq's banking sector with international standards, especially in the key areas of fraud prevention, anti-money laundering (AML), and cybersecurity.

In line with these modernisation efforts, the CBI is promoting digital financial services, particularly among younger age groups with higher smartphone adoption. This shift is expected to foster a generation more reliant on card payments and digital transactions, moving away from Iraq's dependency on cash. The CBI is also accelerating digital transformation by granting a higher number of licences to Payment Service Providers (PSPs) and introducing digital banking licences. These initiatives align with the CBI's goal of building a digital-first economy, paving the way for faster and more secure infrastructure in Iraq's financial industry.

As part of these ongoing efforts, Iraqi banks are adopting advanced cybersecurity defences to combat rising cyber threats as the country embraces digital transformation. Key measures include encryption, multi-factor authentication, AI-driven threat detection, and real-time monitoring. Banks are also enhancing access control with biometric authentication, securing online transactions with encryption and tokenisation, and implementing Security Incident and Event Management (SIEM) systems. Protecting both institutions and their users from these threats is key to building trust in Iraq's digital financial infrastructure.

Complementing these financial sector advancements, Iraq's e-government initiatives are digitalising public services, such as the Ministry of Interior's adoption of digital systems for processing visas and passports. Through collaboration between the Ministry of Interior and PSP partner Tabadul, Electronic Payment Gateways are being implemented, streamlining payments for e-visas and passports, and furthering the country's digital transformation.

The Key Role of Fintech in Iraq's Digital Transformation

Technology vendors are playing an essential role in Iraq's digital transformation journey. Companies like BPC, with global expertise and modern future-proven solutions, can help both startups and established financial institutions implement secure, scalable platforms that meet local regulatory requirements.

In addition, banks and payment providers in Iraq are increasingly collaborating with global fintech partners to enhance their fraud prevention capabilities. By integrating fintech solutions into their systems, they can offer more secure and reliable services to their customers, monitoring and preventing threads from both local and international bad actors.

For instance, Qi Card has enhanced its digital payment capabilities, allowing users to access government salaries and conduct transactions with biometric authentication. Similarly, Cihan Bank is pioneering mobile banking applications by providing customers with convenient access to their accounts.

Public sector support has been strong with the Kurdistan Regional Government's MyAccount initiative so far registering over 600,000 civil servants with their own bank accounts. The initiative aims to ensure one million civil servants have their own bank accounts with around 1,000 ATMs available across the region.

Additionally, BPC provides a platform that enables banks to issue digital payment cards, facilitate QR code payments, and enhance mobile banking solutions. These technologies are especially valuable in regions where access to traditional banking services is limited, helping to promote financial inclusion across the country.

The Road Ahead for Iraq's Financial Infrastructure

The introduction of mobile banking solutions, as demonstrated by fintechs including Zain Cash, has helped to bring financial services to underserved populations in Iraq. Zain Cash alone has onboarded over 1.2 million users, allowing them to make payments, send remittances, and conduct financial transactions without needing a traditional bank account. This growth in mobile wallets will to be a key driver in expanding access to financial services, particularly in rural areas where traditional banking infrastructure is limited, boating financial inclusion the country.

Furthermore, modernising Iraq's financial systems could significantly boost economic growth. Digital payments can formalise Iraq's economy and bring small and medium-sized enterprises (SMEs) into the banking system, whilst also enabling access to key financial tools. With SMEs making up 88% of businesses in Iraq, providing them with access to digital finance promises spur economic development and transform the Iraqi economy.

Click here to learn more about digital banking in The Middle East.