The Republic of Iraq’s Kurdistan Region has been grappling with a significantly intensified situation since the commencement of the United States-Israel war in February 2023. Initially, the region’s vulnerability was linked to the war’s direct impact on Iran, a key strategic partner and a frequent source of tension within the region’s delicate geopolitical landscape. Since the initial outbreak of hostilities, hundreds of missiles and drones have relentlessly targeted the region’s borders, leading to a demonstrable and escalating crisis.
Since February, the attacks have encompassed a wide range of targets, including military installations, energy facilities, and civilian areas, resulting in significant casualties and economic disruption. Masrour Barzani, the Prime Minister of the KRG, stated, “We have been targeted more than 1,000 times by missiles and drones directly from Iran or from inside Iraq by some of the militias. We think these are all unjustifiable attacks on Kurdistan. Unfortunately, we had casualties and we lost people. Many of our infrastructure have been hit badly,” This statement, corroborated by KRG data, reveals a catastrophic toll – the region’s economy has suffered a dramatic decline, with estimates placing the total economic losses at one trillion and 500 billion Iraqi dinars ($1.14bn), a figure handed over to the Iraqi government.
The KRG’s economic data further illustrates the damage. Oil and gas sectors, as well as the movement of companies and investment, have been severely impacted. Furthermore, the conflict has exacerbated a pre-existing financial crisis within the region, compounded by disputes over salary payments for state employees, oil sales, and revenue generation.
According to Peshawa Hawramani, the KRG spokesperson, a direct casualty of these attacks is estimated at 500 deaths, with a considerable number of infrastructure damaged. The war has accelerated a previously existing, albeit growing, concern, with experts now recognizing that the region is facing a prolonged period of instability and economic strain.
A direct casualty of the attacks is the economy, with the oil and gas sectors experiencing a 70 percent decrease in trade across the region. The US assets in Iraq’s semi-autonomous Kurdish region have been targeted, with several attacks occurring before the Iran war began. The IRGC has also launched attacks against Iranian Kurdish groups based in the region, escalating tensions and raising concerns about a potential cross-border conflict. The US has also carried out attacks against Iraqi groups, notably targeting the al-Nujaba Movement, a group known for its involvement in the attacks.
This crisis has intensified beyond Iraq’s borders, with drone and rocket attacks hitting Baghdad International Airport, highlighting the potential for a wider regional conflict. The situation has further compounded the risks for the region’s energy sector, with a halt to oil exports resulting in a 30% decline in production and a potential shutdown of the Strait of Hormuz.
Experts warn that a total shutdown of oil exports could be disastrous for the Kurdish region, particularly given the potential for prolonged instability and a heightened risk of a permanent arena for conflicts between Iran and its proxies versus the US and its allies. Fears are growing within the region’s main cities, Erbil, Sulaymaniya, and Duhok, of a potential shift in the region’s political landscape.
Analysts at the Vision Foundation for Strategic Studies, Aland Kareem Salih, point to a potential total shutdown of oil exports as a major crisis. He warns, “If the war continued and became wider, it will inflict huge harm on the energy sector such as oil and gas and the damage then could be 100 percent,” This represents a serious threat to the region’s economic stability. The KRG and the Iraqi government are attempting to restructure the economy through the Development Road project, but the closure of the Strait of Hormuz has exposed the limitations of Iraq’s ability to face the crisis, potentially leading to a prolonged period of instability and uncertainty for the region.
The situation is viewed with deep concern, and experts emphasize the need for a comprehensive strategy to mitigate the risks and ensure the region’s long-term stability.”
Source: Al Jazeera
