Based on monitoring reports from Hanwei International’s security officers stationed in Iraq and relevant media coverage, Hanwei International’s analysis concludes that Iraq’s overall security situation remained severe and complex in June, with multiple risks overlapping comprehensively. Politically and economically, Iraq’s national‑weapon‑ownership drive met setbacks amid internal divisions and external pressure. Its energy industrial chain sustained severe shocks, facing triple crises in crude‑oil exports, gas‑fired power generation and refined‑oil supply. Livelihood‑related grievances erupted intensively, triggering waves of protests and demonstrations. In terms of regional conflicts, Iranian Kurdish opposition groups came under regular military strikes, illegal drone incursions spread nationwide, and multi‑level counter‑terrorism mopping‑up operations yielded tangible results. On the social‑security front, grassroots public‑order problems such as shootings, abduction‑for‑ransom and robberies became prominent.
In June 2026, three leading global economic‑and‑financial‑risk assessment institutions unanimously determined that Iraq had entered a severe economic recession driven by ongoing geopolitical conflicts. According to the latest assessment by the International Monetary Fund, Iraq would be one of the countries hardest‑hit by Middle‑East geopolitical tensions in 2026, with three core economic indicators‑‑inflation, fiscal position and balance of payments‑‑under simultaneous strain. In its June economic outlook, the European Bank for Reconstruction and Development sharply revised down Iraq’s full‑year growth forecast, cutting the projected 2026 GDP growth rate from 3.6 % to 1.5 %. S&P Global assigned Iraq a long‑term sovereign credit rating of B‑ and a short‑term rating of B, maintaining a negative rating outlook.
I. Political and Economic Dimensions
(I) Setbacks for Iraq’s weapons‑nationalisation drive: mutual reinforcement of internal polarisation and external pressure
In June 2026, Iraq actively advanced weapons nationalisation. While a series of landmark milestones were achieved, the process remained mired in severe internal rifts and external interference.
Internal divisions: Moderate‑aligned militia groups guided by religious authorities and ruling factions voluntarily cooperated in weapons stocktaking and hand‑over, agreeing to place their arms and personnel under government administration and deployment. Among them, the Al‑Nasr Coalition announced its withdrawal from the Popular Mobilisation Forces and initiated weapons hand‑overs; the Peace Brigades completed the hand‑over process ahead of schedule; and the Imam Ali Brigades rolled out supporting disarmament plans. By contrast, Iran‑aligned hard‑line armed groups set preconditions for disarmament and refused full demilitarisation. Ashab al‑Kahf and the Nujaba Movement publicly rejected weapons surrender. Although Kata’ib Hezbollah verbally backed weapons nationalisation, it refused to disarm over sovereignty disputes and threatened full‑scale strikes against U.S. targets if necessary.
External interference: The United States recently appointed a new Special Envoy for Iraq and adopted structural, long‑term indirect pressure tactics to curb Iranian military influence in Iraq. Diplomatic measures tie U.S.‑Iraq security‑cooperation funding to the disarmament of pro‑Iran militias. Financially, sanctions against enterprises and financial institutions linked to militia groups were tightened. Politically, Washington firmly refuses to recognise any cabinet incorporating pro‑Iranian factions. Militarily, U.S. military‑strike deterrence remains on the table.
At present, pro‑Iran hard‑line armed groups still possess weaponry including rockets and drones. U.S. military and political facilities in Iraq as well as Iraqi pro‑U.S. political figures are potential strike targets. The probability of attacks against foreign‑related sites in Baghdad, Erbil and the Green Zone has risen substantially. Meanwhile, splits within militia blocs may spill over into sectarian and civilian spheres, exacerbating confrontation between pro‑disarmament and anti‑disarmament camps and potentially triggering a sharp rise in grassroots armed clashes.
(II) Geopolitical blockade cripples the energy industrial chain: simultaneous disruptions to production, power generation and refining
Buffeted by U.S.‑Iran regional tensions and the Strait of Hormuz blockade, Iraq’s energy industrial chain suffered widespread disruption, with crude‑oil exports, gas‑fired power supplies and refined‑oil security all in crisis.
Crude‑oil exports: Iraq’s average daily crude‑oil exports in May stood at approximately 329 000 barrels, largely unchanged from April and only around 10 % of pre‑conflict volumes. The two existing crude‑oil export routes are the Kurdistan‑Ceyhan Pipeline (233 000 barrels per day) and the southern Strait of Hormuz corridor (only 96 000 barrels per day). Total monthly oil revenue reached roughly USD 1 billion, far below the pre‑conflict level of USD 7 billion. Fiscal revenue for the Kurdistan Regional Government in northern Iraq concurrently plunged by 70 %.
Gas‑fired power supply: On 3 June, gas output at the Kormor gas‑field in the Kurdistan Region declined. Regional power‑generation capacity fell from 4 500 MW to 3 700 MW, triggering intermittent blackouts across multiple residential districts in Erbil. Although local authorities had previously invested around USD 64.3 million in constructing multiple substations, the power shortfall caused by gas shortages cannot be offset in the short run, forcing residents to rely on private diesel generators for basic electricity.
Refined‑oil security: Latest data from Iraq’s Ministry of Oil show domestic daily gasoline consumption climbed to a historic high of 35 million litres. Domestic refineries can produce a maximum of only 30 million litres per day, creating a daily supply‑demand gap of nearly 4 million litres. Shortages stem mainly from foreign‑funded enterprises withdrawing over security risks, alongside surging market demand driven by religious pilgrimages and holiday travel. The government can currently rely solely on refined‑oil stockpiles to shore up energy supplies.
Prolonged power outages, gasoline shortages and plummeting fiscal revenue from oil exports may fuel sustained public discontent, spark mass demonstrations and drive a sharp increase in collective‑protest incidents.
(III) Deteriorating livelihood conditions trigger waves of mass protests across multiple governorates
Protests broke out across Iraq, covering Baghdad, Basra, Nineveh, Qadisiyah and other governorates. Demonstrators fell into four broad groups: farmers, ordinary citizens, university graduates and war veterans.
Farmers: Farmers from multiple central‑southern Iraqi provinces gathered in Liberation Square, Baghdad, for a new round of rights‑defence protests, demanding prompt government settlement of long‑overdue crop‑procurement payments and agricultural subsidies. Protesters planned to march across the Republic Bridge toward the Green Zone but were blocked by security forces, leading to a stand‑off without violent clashes.
Ordinary citizens: As summer‑time high temperatures arrived in 2026, nationwide power‑supply‑demand tensions intensified, with a power shortfall reaching 40 000 MW. Gas supplies in Basra fell by roughly two‑thirds year‑on‑year, nearly halving regional power output. A rotating‑supply regime of “four hours on, two hours off” further stoked public anger. Power shortages were particularly acute in Qadisiyah Governorate, where blackouts exceeded five hours in some districts. Local residents protested for two consecutive days, paralysing inter‑city highway traffic.
University graduates: Youth‑unemployment pressures worsened across Iraq. Fresh and past graduates converged on Baghdad for large‑scale demonstrations, urging the government to honour employment pledges and reopen public‑sector recruitment. Large numbers of riot‑police personnel maintained order. Footage later emerged showing law‑enforcement officers beating young demonstrators, drawing attention from local human‑rights organisations.
Veterans: Wounded veterans staged a protest outside the municipal hall in Mosul, Nineveh Governorate, demanding fulfilment of government promises for residential‑land allocation. Nineveh served as a front‑line counter‑terrorism theatre with heavy security‑force casualties, yet unresolved post‑conflict resettlement grievances fuelled fierce discontent and protests.
Large‑scale demonstrations caused road blockages and stand‑offs in many locations, frequently disrupting inter‑city transport and severely undermining business operations and daily life. More critically, mass gatherings raise risks of secondary security incidents including stampedes, confrontations and riots, with sharply elevated prospects of violent clashes.
II. Regional‑Conflict Dimensions
(I) Kurdish‑opposition armed groups
Camps belonging to Kurdish‑opposition factions inside Iraq endured multiple rounds of military strikes, concentrated in the Arana Valley, Barisan Valley, Koya‑Azadi Camp and other locations, via drone and missile attacks.
On 31 May, the Komala Party of Iranian Kurdistan disclosed that one of its camp facilities in northeast Erbil, Iraqi Kurdistan Region, suffered precision hits from two missiles. On 2 June, Komala issued another statement reporting two missile strikes against its headquarters in the Arana Valley, publicly accusing Tehran of launching the cross‑border military operation. On 8 June, the Azadi Camp near Koya, east of Erbil in the Kurdistan Region, was raided by three drones. Two crashed inside the compound, damaging property; the third struck camp medical facilities, with no human casualties. On 10 June, facilities belonging to the Democratic Party of Iranian Kurdistan in the Barisan Valley near Erbil came under three‑drone assault. One drone was successfully intercepted; the other two crashed and were destroyed, causing no injuries.
Successive drone and missile strikes against opposition camps around Erbil demonstrate the normalisation of cross‑border military strikes. As a forward theatre for Iranian operations against dissident groups, the Kurdistan Region is chronically exposed to cross‑border fire. Residential areas on city outskirts and in villages face spill‑over risks, gravely endangering civilian lives and property.
(II) Sustained drone attacks
Drone‑related security risks intensified in Iraq. Unidentified drone overflights and precision strikes were recorded from residential zones and storage facilities in northern Erbil down to Babil, Najaf and Karbala in the centre‑south, spanning Iraq’s full north‑south depth.
On 31 May, a low‑altitude security incident occurred in Babashtian Village, Soran District, Erbil Governorate. An unverified drone crashed, damaging buildings without casualties. On 10 June, at least two unidentifiable drones flew at low altitude over Babil Governorate in south‑central Iraq, traversing southern parts of the province before heading west toward uninhabited desert terrain on the Najaf‑Karbala border. On 11 June, a grain silo in the Qushtepa area of Erbil Governorate sustained precision strikes by two suicide drones. The main warehouse structure suffered severe damage and large volumes of stored grain were destroyed, illustrating targeted threats to livelihood‑critical infrastructure.
In response to multiple illegal drone incursions, Iraq’s Supreme Judicial Council recently issued a special document formally bringing drone‑related unlawful activities under counter‑terrorism legislation. Authorities have not detailed the exact scope of application. The new rules may apply not only to armed factions but also to private individuals and commercial operators flying drones without permits. Individuals are advised to strictly observe Iraqi legal prohibitions against unauthorised drone use.
(III) Counter‑terrorism operations
In June, Iraq conducted simultaneous counter‑terrorist mopping‑up operations across multiple governorates, covering five key zones: Nineveh, Baghdad, Diyala, Kirkuk and Anbar. Tactics included targeted ground arrests, large‑scale arms seizures and joint air‑ground airstrikes. Regional security chiefs and finance handlers were apprehended, and numerous terrorists killed.
On 2 June, Popular Mobilisation Forces fighters killed three ISIS militants in the Ba’aj Desert, western Nineveh. On 11 June, Iraqi counter‑terrorism special forces captured a senior ISIS security operative in Tarmiyah, north of Baghdad, effectively dismantling his underground security‑command network. Also on 11 June, the Iraqi military launched two rounds of airstrikes in Diyala Governorate, killing two ISIS militants including a senior local commander. On 14 June, Iraq’s Counter‑Terrorism Service met fierce terrorist resistance during clearance operations in Yargun, southern Kirkuk, and confirmed the killing of three ISIS members. On 21 June, the Iraqi Air Force carried out two waves of airstrikes against hidden ISIS strongholds deep in the Anbar Desert, followed by ground incursions by the 5th Army Division to complete mopping‑up work.
III. Social‑Security Dimensions
Recorded social‑security incidents in June fell into three main categories: shootings, abduction‑for‑ransom and armed robbery, occurring across urban and rural areas in Baghdad, Erbil, Dhi Qar, Babil and other governorates.
Shootings: On 2 June, an ordinary civilian was shot dead in public by unidentified gunmen in the Seven Palaces district of eastern Baghdad. On the same day, a clash in Baghdad left one dead and one injured; police seized multiple firearms and arrested suspects. On 7 June, heavy gunfights erupted in Erbil. A vehicle involved in the conflict sustained multiple bullet hits, killing a four‑year‑old girl inside. On 11 June, everyday friction among young people in the Sharif district, west of Nasiriyah city, Dhi Qar Governorate, escalated into inter‑tribal armed exchanges using medium‑calibre weapons, leaving at least three wounded. On 17 June, several suspects fired indiscriminately at civilians in the Dora district, southern Baghdad.
Abductions: On 10 June, Baghdad police rescued a woman lured and abducted from Diyala Governorate and arrested two kidnappers. Babil police solved a blackmail‑for‑private‑video case via technical tracing and apprehended suspects inside a shopping mall.
Robbery: On 15 June, Babil police dismantled a tricycle‑robbery gang that lured drivers to remote locations under the pretence of offering rides before committing robberies.
Recommendations for Chinese‑funded enterprises and personnel in Iraq
For enterprises:
Maintain strict neutrality and avoid entanglement in militia‑faction conflicts. Require all staff to refrain from public‑domain or online commentary on sensitive topics including militia disarmament and U.S.‑Iran rivalry. Do not attend local rallies or political events. Fully vet upstream and downstream business partners to avoid commercial ties with militia‑linked enterprises and financial institutions, so as to avert secondary sanctions or armed reprisals.
Tier‑down operational scope and stay clear of high‑risk zones. Scale back field missions and long‑haul transport around Baghdad’s Green Zone, areas of operation for hard‑line factions such as Kata’ib Hezbollah, and northern Kurdish border zones. Deploy on‑site staffing in relatively stable southern areas such as Basra, and systematically relocate non‑essential staff and their dependents to secure locations.
Upgrade camp‑security standards to guard against drone incursions and armed assaults. Reinforce and raise perimeter walls at barracks, plant sites and project locations. Install round‑the‑clock high‑definition surveillance and infrared‑alarm systems, with professional security personnel on 24‑hour rotating duty for key zones. Fit warehouses and finance offices with multi‑layer protective measures to fend off armed looting.
For individuals:
Exercise caution in speech and conduct to avoid being drawn into political disputes. Do not discuss local U.S.‑Iran tensions or militia disarmament. Avoid observing, photographing or reposting footage of armed clashes or disarmament‑site scenes. Exercise caution with strangers; do not disclose home addresses, personal assets or work affiliations to guard against theft, robbery and extortion.
Restrict travel and actively avoid high‑risk locations. Adopt a “no non‑essential outings” mindset. Never travel alone at night; travel by day in pairs with professional security escorts where feasible. Keep away from sensitive sites including U.S.‑related facilities, parliament buildings, militia bases, border crossings and northern Kurdish mountainous zones. Carry copies of passports and residence permits and remain calm during security checks.
Strengthen home‑safety awareness and master self‑rescue skills. Keep doors and windows secured while indoors. Upon hearing drone engines, explosions or gunfire, take cover immediately; do not lean out to observe or go outdoors. Prepare power banks, torches, food and first‑aid kits to cope with prolonged blackouts and supply disruptions.
Contact relevant authorities promptly in an emergency. Iraq Police Emergency: 130 Iraq Medical Emergency: 105 24‑Hour Global Consular Protection & Service Hotline of China’s Ministry of Foreign Affairs: +86‑10‑12308, +86‑10‑65612308 Consular Protection & Assistance, Chinese Embassy in Iraq: +964‑7901912315 Consular Protection & Assistance, Chinese Consulate‑General in Erbil: +964‑7515477820 Consular Protection & Assistance, Chinese Consulate‑General in Basra: +964‑7858618940
