‘War has no benefit for anyone’: Iraq’s Kurdistan region hit by rising prices, instability amid Iran conflict
Output from Iraq’s main southern oilfields – where most of its crude is produced – has dropped sharply as the Iran conflict effectively shut down the Strait of Hormuz.
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KURDISTAN REGION, Iraq: As the conflict in Iran drags on, its economic ripple effects are being felt well beyond its borders, with neighbouring Iraq among the hardest hit.
In the semi-autonomous Kurdistan region of northern Iraq, businesses and households alike are grappling with rising prices, disrupted supply chains and deepening uncertainty – all of which are making daily life increasingly difficult.
The region’s fragile economy, heavily reliant on oil revenues, has been particularly vulnerable to the ongoing instability.
Small businesses in the regional capital Erbil are already feeling the strain. Owners say the cost of goods has surged, while access to supplies has become increasingly unpredictable.
For locals like Sarhad Qadir Abdulla, the economic pressure is personal. A former member of the Kurdish Peshmerga forces, he now works as a taxi driver to make ends meet.
“The war has affected us. Things have become expensive, the market has weakened, and prices in general have gone up,” he told CNA.
“We would like the war to stop. War has no benefit for anyone.”
OIL TENSIONS
Economic difficulties have been compounded by long-running tensions between the Kurdistan Regional Government (KRG) and federal authorities in Baghdad, particularly over control of oil revenues.
Regional officials have accused Baghdad of imposing restrictive customs measures amounting to an economic blockade, as well as limiting the region’s access to US dollars.
They say a new electronic customs system introduced by the federal government, which allows closer monitoring of imports and revenues, undermines the region’s autonomy and control over trade.
Still, the two sides agreed to resume oil exports to the international market via a key pipeline in the Kurdistan region, to Turkiye’s Ceyhan energy hub starting last Wednesday (Mar 18).
The move follows a sharp 70 per cent drop in output from Iraq’s main southern oilfields – where most of its crude is produced – amid the Iran conflict. The United States-Israel war against Iran has effectively disrupted traffic through the vital Strait of Hormuz, through which 20 per cent of global oil is shipped.
But even with the alternative route to Turkiye, authorities acknowledge that it will only offset a fraction of the country’s lost daily output.
LIVING IN FEAR OF STRIKES
For residents, these pressures are just the latest chapter in a long history of hardship.
“For many years, Kurds have been oppressed and displaced,” said grocer Wasman Ghafour. “There’s almost no country you can go to where there are no Kurds, and it is all because of war, oppression, and displacement.”
In recent weeks, the Kurdistan region has faced near-daily drone and missile strikes from Iran targeting US bases in neighbouring areas, raising safety concerns for civilians.
Shopkeeper Halgurd said the attacks have unsettled both businesses and civilians, with many people cutting back on spending amid the uncertainty.
“(Iran) has attacked this area two or three times. People have now become quite uncomfortable. While the war is on the Iranian side, it has an impact here as well,” he said.
With no clear end to the conflict in sight, many in northern Iraq say they are bracing for more hardship.
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