Iraq

Current status

Iraq faces severe supply chain disruption risks with 85 critical and high-severity events recorded over the past 30 days, including chemical weapons attacks and conventional military operations in Baghdad. The security deterioration represents a sharp escalation from Iraq's already fragile baseline, with governance indicators ranking among the world's lowest. Military actions and terror plot allegations involving Iranian-backed groups signal widening regional conflict spillover into Iraq's core oil infrastructure zones.

Supply chain impact

• Oil and energy supply chains face immediate disruption risks as military operations target Baghdad and surrounding areas where key petroleum infrastructure and government facilities are concentrated.
• Asian refineries dependent on Iraqi crude exports, particularly in China, India, and South Korea, should prepare for potential supply interruptions given the proximity of conflicts to major oil production regions.
• Transportation routes through Iraq connecting Turkey and the broader Middle East face elevated security risks, affecting overland cargo movements and cross-border logistics operations.
• International companies with operations in Baghdad or southern Iraq oil fields may need to implement emergency evacuation procedures given the use of chemical weapons and sustained military activity.
• Regional aviation and shipping insurance premiums are likely increasing for Iraq-related cargo, raising logistics costs for all sectors beyond petroleum.

Watch points

• Monitor daily oil production reports from Iraq's Oil Ministry and any announcements of force majeure declarations from major oil companies operating in southern Iraq fields.
• Track expansion of military operations beyond Baghdad toward Basra province, which would directly threaten Iraq's primary oil export terminals and loading facilities.
• Watch for formal travel advisories or evacuation orders from major economies' embassies in Baghdad, which typically precede broader supply chain partner withdrawals.