Report Summary
Based on monitoring reports from Hanwei International’s security officers stationed in Iraq and relevant media coverage, Hanwei International assesses that Iraq remained in a highly volatile state in March. The China Council for the Promotion of International Trade designated Iraq as an Extremely High Risk country on March 24.
Politically and economically, Iraq faces severe hurdles in the nomination of a new Prime Minister and presidential election, with the cabinet formation deadlock unlikely to be broken in the short term. The national oil industry is on the verge of a full shutdown, inflicting massive losses on state fiscal revenue. Mass livelihood protests have broken out frequently, accompanied by small-scale local clashes.
In terms of regional conflicts, Iraq has become a core battlefield for conflicting parties and suffered successive severe attacks, triggering rising sectarian tensions and a continuous surge in terrorist risks.
Political and Economic Situation
1. Deadlock in Prime Minister Nomination and Presidential Election, Cabinet Formation Stagnates
In March 2026, Iraq remained mired in a political deadlock with the cabinet formation process largely stagnant. The Shiite Coordination Framework saw internal disputes over Nouri Al-Maliki’s prime ministerial nomination. Despite rumors of a nomination withdrawal, the bloc ultimately decided to postpone the decision until the end of regional conflicts.
On the presidential election front, irreconcilable rifts persist between the two major Kurdish political parties, leaving the April 11 election full of uncertainties. Long-standing disagreements over presidential candidates among Kurdish factions, explicit boycotts of electoral sessions by multi-party lawmakers, and fierce debates among political groups have kept the presidential election process highly uncertain.
Overall, divisions within and among the Shiite, Sunni and Kurdish political blocs continue to deepen, and constitutional procedures have advanced at a sluggish pace. The caretaker government holds limited power and authority, making it difficult to coordinate and respond effectively to various crises. Mutual constraints among political factions have further exacerbated political instability.
2. Full Shutdown of Oil Industry Puts Economic Pillar at Risk
Iraq’s economy fell into severe turmoil in March amid a comprehensive shutdown of the oil industry, mainly driven by crude output disruptions and blocked export routes. Spillover from Middle East armed conflicts and restricted navigation in the Strait of Hormuz led to the successive suspension of major oilfields including Rumaila, Shaikan and Atrush.
The daily output reduction reached 1.6 million barrels, causing an approximate daily economic loss of 128 million US dollars. If the strait blockade persists, a one-week shutdown would result in nearly 900 million US dollars in losses, while a one-month halt could create an economic gap exceeding 3.8 billion US dollars. Multiple international energy firms have suspended operations in Iraq to avoid security risks, further worsening the plight of the domestic oil sector. Meanwhile, crude oil export routes from the Kurdistan Region via Turkey’s Ceyhan Port were cut off, bringing Iraq’s overall oil export system to a complete standstill.
The massive economic losses stemming from the oil shutdown have severely impacted state fiscal revenue, deepened domestic governance difficulties, formed a vicious cycle with the regional security situation, and continuously amplified various security risks.
3. Frequent Mass Protests Drive Rising Conflict Risks
Multiple protests erupted across Iraq in March, focusing mainly on livelihood issues in key provinces including Baghdad, Diyala and Kirkuk. Participants include young graduates, municipal sanitation workers, administrative staff and communication base station agents. Their demands centered on living conditions with no obvious radical political agendas. Most protests remained peaceful, with sporadic small-scale clashes in some areas.
Early March: Hundreds of young Iraqi graduates staged protests in Baghdad and other provinces, demanding government employment opportunities matching their academic qualifications.
March 2: Iraqi security forces fired tear gas at protesters gathering around Baghdad’s Green Zone, dispersing them to Liberation Square in downtown Baghdad. Confrontations left 15 people injured or suffocated from tear gas inhalation and stone-throwing. On the same day, dozens of communication base station agents in Kirkuk protested outside the provincial government against the shutdown of over 500 internet base stations, demanding the revocation of the order and alternative solutions.
March 3: Municipal sanitation workers in Khales and Bani Saad, Diyala Governorate, staged a sit-in strike over a consecutive 15% salary cut in February (following a 14% deduction in January) due to government funding shortages.
March 4: Hundreds of municipal employees in Diyala gathered outside the provincial governor’s office in Baqubah to protest ongoing salary deductions and demand official responses to their appeals.
Regional Conflict Situation
Spillover from ongoing regional conflicts significantly deteriorated Iraq’s security landscape in March. Since the outbreak of hostilities in late February, nationwide violent incidents have killed at least 101 people, including security personnel, militias and foreign nationals. Escalating regional tensions, unlikely to ease soon, have severely disrupted civilian facilities, armed strongholds and U.S. military presence across Iraq.
1. Civilian Facilities Targeted
A spate of attacks hit provinces and border areas including Basra, Babylon, Nineveh and Baghdad. Eight major incidents involved rockets, drones and military helicopters, targeting civilian sites (football stadiums, residences, farms), infrastructure (telecom towers, oil refineries, industrial facilities), and key hubs (international airports, border crossings). The attacks left at least 8 injured with no mass fatalities.
Civilian Sites
March 8: A rocket struck a football stadium near Jabir Ibn Hayyan district in Sham Sumayeh, Basra, causing no casualties in a typical indiscriminate raid.
March 9: An unidentified missile hit a residential building in southern Al-Jabaiya, Babylon, with loud explosions audible across surrounding neighborhoods.
March 13: A drone crashed and exploded after hitting a wall at a farm in Bartalla sub-district, east Mosul, Nineveh.
Infrastructure
March 7: Two drones struck a telecom tower near Halabja, Kurdistan, severely damaging the facility and cutting off mobile and internet services in Qoraman and surrounding border areas.
March 11: An unidentified military helicopter attacked a civilian-run oil refinery near Ain Safra, east Mosul, burning fuel tanks and containers with no casualties.
March 16: An industrial facility near Badush Dam, north Mosul, was struck twice by fighter jets, injuring three members of the Popular Mobilization Forces (PMF) and triggering fuel tank fires.
Key Hubs
March 15: Baghdad International Airport came under rocket attack for the second time within hours, leaving 6 injured (4 airport staff, 1 security personnel, 1 engineer) with varying degrees of injuries.
March 24: A rocket attack on the commercial zone at the Shalamcheh Iraq-Iran border crossing injured 5 people (2 Iraqis, 3 Iranians).
2. Attacks on Armed Faction Strongholds
Due to its special geopolitical location, Iraq has become a core battleground for rivalry between Iran and the U.S.-Israel alliance. Iran regards Iraq’s Kurdistan Region as a key area to eliminate Kurdish opposition groups, while the U.S. and Israel view the PMF as an Iran-aligned paramilitary force. Frequent cross-border attacks on Iraqi territory have further worsened local living conditions.
Kurdistan Region
March 5: The headquarters of Iranian Kurdish opposition group Komala Party in Surdash, Sulaymaniyah, came under successive rocket and drone attacks. The same night, the headquarters of another opposition group Hawar in Habat District, Erbil, was also targeted.
March 18: Four drones struck Kurdish opposition military positions west of Erbil, causing casualties and on-site fires.
March 19: Komala Party strongholds in Zarkizra, Sulaymaniyah, were attacked.
March 29: The Community Peacemakers Team (CPT) recorded approximately 474 attacks in Kurdistan from February 28 to March 28, leaving 14 dead, 93 injured, and destroying at least 46 residential houses and 32 vehicles.
Popular Mobilization Forces (PMF)
March 6: A suicide drone attacked the headquarters of PMF 50th Brigade in Mosul, Nineveh, causing facility damage.
March 7: Airstrikes targeted positions of the PMF and Hezbollah Brigade in Rahaliyah, western Anbar, as well as the headquarters of PMF 33rd Brigade and affiliated Imam Ali Brigade in Mosul, leaving casualties.
March 16: Positions of PMF 18th and 19th Brigades in Al-Qaim, Anbar, endured multiple rounds of drone attacks.
March 19: The headquarters of PMF 63rd Brigade in Salahuddin Province was struck twice.
3. Targeting U.S. Military Presence
Iran-aligned armed factions represented by the Iraqi Islamic Resistance have launched frequent attacks on U.S. military installations in Iraq. Meanwhile, calls for jihad by Shiite religious leaders have further escalated militant operations.
The U.S. Embassy in Baghdad’s Green Zone endured repeated attacks in March:
March 7: Several rockets launched from Al-Qanat area, eastern Baghdad, targeted the embassy, with explosions heard across the capital.
March 16: Iraqi air defense forces intercepted a drone near the embassy; its satellite communication system had already been damaged by previous attacks and rendered inoperable.
March 17: Four drones attacked the embassy; some downed drones crashed onto Abu Nawas Street and areas near the Green Zone compound.
March 12: A U.S. KC-135 aerial refueling tanker was attacked by the Iraqi Islamic Resistance and crashed in western Iraq, killing 4 crew members and leaving 2 missing. The group claimed the strike was retaliation for U.S. violations of Iraqi sovereignty and territorial integrity.
Other Developments
1. Underlying Sectarian Tensions and Rising Terrorist Risks
Iraq faces mounting risks of sectarian division exacerbated by external interference. Muqtada Al-Sadr, leader of the Shiite Patriotic Movement, has called for national unity to curb sectarian rifts. Meanwhile, remnants of ISIS continue plotting terrorist attacks in rugged northern areas such as Kirkuk, posing severe challenges to Iraq’s social stability and public safety.
Sectarian Conflict RisksOn March 11, Muqtada Al-Sadr issued a clear warning against attempts to exploit regional unrest to incite sectarian strife. He stated intelligence indicated certain forces were deliberately stoking inter-sect tensions amid ongoing turmoil. He called on all Iraqis, both Shiite and Sunni, to remain calm and restrained and uphold Islamic doctrines and the Quran to maintain sectarian unity.
Terrorist RisksOn March 25, Iraqi security forces launched a manhunt for four ISIS militants in a remote village in Hawija, Kirkuk. Intelligence confirmed the group was plotting terrorist attacks to create public panic. Complex terrain and weak security control in northern Iraq provide ideal hideouts for ISIS remnants. Constrained by regional conflicts, Iraqi security forces have diverted most resources to counter external attacks and sectarian tensions, leaving room for terrorist remnants to regroup and raising overall regional security risks.
Prevention Recommendations for Chinese Enterprises and Personnel in Iraq
Enterprise Level
Strengthen risk assessment and flexibly adjust operational arrangements. Closely track key political developments including presidential and prime ministerial elections, alongside updates on oil industry shutdowns and blocked export routes. Obtain security alerts through the Chinese Embassy in Iraq, local partners and authoritative media to assess risks of factional clashes, extremist attacks and infrastructure collapse. Scale down staff deployment and operations in politically sensitive and high-risk areas such as Baghdad, Basra, Kurdistan and PMF-controlled zones; avoid large-scale outdoor operations and material transport during election and protest periods. Temporarily scale back operations at oil and energy projects to prioritize personnel safety, and resume normal work gradually once the situation stabilizes.
Upgrade security deployment to guard against potential hazards. Improve security facilities at office compounds, project camps and warehouses by installing surveillance systems, explosion-proof equipment and fire fighting devices, designating security perimeters and implementing 24-hour patrols to guard against illegal intrusion, armed attacks, theft and fires. Strengthen guarding at idle oilfields and supporting facilities to prevent sabotage and property theft. Establish close coordination with security companies and local police, and hire qualified professional security teams for full-time protection when necessary.
Individual Level
Follow official alerts and keep emergency contacts accessible. Stay updated on security notices issued by the Chinese Embassy in Iraq, and save contact details of the embassy, local police and regular hospitals for immediate assistance during emergencies. Take immediate shelter in solid structures during armed or drone attacks, prioritize personal safety, and contact the embassy for support once the situation stabilizes.
Minimize non-essential travel and avoid high-risk areas. Reduce unnecessary outings, and steer clear of politically sensitive regions including Baghdad and Kurdistan, areas with frequent extremist activities and protests, as well as peripheries of oilfields, ports and U.S.-Iraq military facilities to avoid being affected by facility sabotage or sudden conflicts. If travel is unavoidable, choose well-patrolled routes and minimize outdoor stay time.
Contact relevant institutions promptly in case of emergencies.
Iraq Emergency NumbersPolice: 130
Ambulance: 105
China Global 24/7 Consular Protection Hotline+86-10-12308
+86-10-65612308
Chinese Embassy in Iraq Consular Hotline: +964-7901912315
Chinese Consulate General in Erbil Consular Hotline: +964-7515477820
Chinese Consulate General in Basra Consular Hotline: +964-7858618940
