Notwithstanding these official statements, political opinion in Iraq on Russia’s conduct is divided along partisan and factional lines. The imposition of sanctions against Russia has complicated its energy investments in Iraq and prospective arms purchases from Moscow and could have a long-lasting adverse impact on the Iraqi economy.
Reactions within Iraq to Russia’s invasion of Ukraine
In keeping with extant political divisions, Iraq’s reaction to the Ukraine war has been polarized. Hashd al-Shaabi or Popular Mobilization Forces (PMF), an umbrella organization of 40 mostly Shiite militias, is the most sympathetic bloc to Russia’s policies in Ukraine, as it regularly engages with Moscow on Syria and counterterrorism. Abbas al-Zaidi, an official from the political office of the PMF faction Kataib Sayyid al-Shuhada, warned that the British and Americans will harness their experience “forming gangs, mafias and deaths squads in Iraq and Honduras” in Ukraine. Other Iran-aligned militia figures were more measured in their embrace of pro-Kremlin narratives. Abu Hussein al-Hamidawi, the secretary-general of Kataib Hezbollah, acknowledged that the U.S. forced Russia’s hand into war, but also claimed that Russia is “no less bloody” than Europe and the U.S., and said that it would need to a miracle to win the war due to sanctions.
Moqtada al-Sadr, the leader of the Sadrist movement that won the most seats in the October 2021 Iraqi parliamentary elections, was initially more critical of the war. Al-Sadr stated that war between Russia and Ukraine is “absolutely useless” and added that “I am still looking forward to the principle of dialogue between two Christian countries.” However, by March 4, al-Sadr’s position mirrored al-Hamidawi’s, as he claimed that the war broke out in Ukraine “because of the American policy there.” The president of Iraq’s Kurdistan Region, Nechirvan Barzani, strongly supports Turkey’s efforts to mediate between Russia and Ukraine. Although the head of the pro-Russian Donetsk People’s Republic Denis Pushilin spoke with Rudaw and backed Barzani’s position that self-determination is more important than upholding the territorial integrity of states, the Kurdistan Region has not taken steps to strengthen ties with Russia.
The Iraqi public also disagrees on the merits of the Ukraine war. A poster saying “We support Russia” surrounded by large portraits of President Vladimir Putin surfaced near a base operated by pro-Iran militia Asaib Ahl al-Haq in Baghdad. The poster’s removal by the Iraqi security forces exacerbated disagreements on Ukraine, especially on social media. Supporters of Tehran-aligned former Iraqi Prime Minister Nouri al-Maliki tended to sympathize with Russia due to their lingering antagonism toward the U.S. over the 2003 Iraq War, while al-Sadr supporters tended to embrace strict neutrality.
The economic and security implications for Iraq
The ongoing war in Ukraine has already had serious adverse economic impacts on Iraq, even if rising oil prices may ameliorate this situation. Iraq imports 50% of its food supply and although it does not rely on wheat from Russia or Ukraine, rising global prices have a spillover impact. The Iraqi Trade Ministry has attributed the rise in cooking oil prices to supply disruptions caused by the Ukraine war, and to stem resultant protests in southern Iraq, the government has provided a $70 monthly allowance to economically vulnerable citizens. The Iraqi authorities have also subsidized wheat and cooking oil, as food prices had doubled by late March. In response to soaring cooking oil prices, the Kurdistan Region authorized strict measures against price gouging and Barzani discussed the replacement of foreign laborers with domestic workers.
If a cease-fire takes hold in Ukraine, the current surge in food prices is likely to subside, but the longer-term impact of sanctions against Russia remains unclear. On March 1, Russian Ambassador to Iraq Elbrus Kutrashev reaffirmed Moscow’s desire to maintain and expand its estimated $14 billion investment portfolio in Iraq, which is mostly concentrated in the oil and gas sector. Kutrashev also emphasized the difficulties that Iraq might face in finding alternative investors, as companies would need to allocate 20-25% of their budgets to security when investing in the country and highlighted the decades of experience that Russian businesses have in Iraq.
Despite the Kremlin’s optimistic rhetoric, Iraqi officials are circumspect about deepening economic ties with Russia. On March 3, Iraq received requests from European and American oil purchasers, which could allow it to divest from Russian investments, and the Iraqi Central Bank and Trade Bank called on companies to avoid money transfers to Russia in order to insulate the economy from Western sanctions. Due to the probability of long-term sanctions on Moscow and heightened Western demand for alternative suppliers, Iraqi economist Omar al-Rubaie urged the Iraqi government to invest $10 billion in its oil sector to increase its production to 8 million barrels per day (bpd), up from 4.25 million in early 2022. Given that Iraq’s oil production quota under OPEC+ is 4.28 million bpd, it is unclear how this ambitious target can be achieved.
Given these policies and recommendations, Iraq is likely to embrace efforts to diversify its energy sector’s commercial links and incrementally reduce its reliance on Russian investment in the years ahead. This divestment would profoundly impact Iraqi Kurdistan, where Rosneft secured a controlling 60% stake in its main oil pipeline for $1.8 billion in October 2017. As Rosneft failed to accrue profits from its $4 billion energy investments in Iraqi Kurdistan from 2017-19 and its plans to sell gas from Iraqi Kurdistan via Turkey to Europe are dashed by tightening sanctions, Moscow’s prospects for lucrative deals in the Kurdistan Region are fast receding.
The deterrent effect of sanctions on Iraq’s purchase of Russian weapons could be more pronounced. Iraq ordered $1 billion in Russian tanks in 2017, which augment its extensive stocks of Russian-made armored vehicles. Iraq also announced in May 2019 that it made a concrete decision to purchase Russia’s S-400 air defence system. While Countering American Adversaries Through Sanctions Act (CAATSA) secondary sanctions could impede Iraq’s arms purchases, a U.S. official hinted that Iraq could be granted an exemption. Although Russia offered to sell Iraq S-400s to protect its airspace after Islamic Revolutionary Guard Corps (IRGC) Quds Force chief Qassem Soleimani’s assassination in January 2020, it refrained due to probable opposition from partners, such as Israel, Saudi Arabia, and the UAE. Russia’s desire for hard currency and potential loss of arms clients could reverse these inhibitions and facilitate an S-400 sale to Iraq.
Although Iraq has avoided taking sides in Russia’s war with Ukraine, the conflict could exacerbate factional divisions and profoundly impact the Iraqi economy’s near-term trajectory. While the strides made in Russia-Iraq cooperation over the past decade are unlikely to be destroyed by the war, Baghdad is likely to limit its cooperation with Moscow to essential spheres and overcome the impact of sanctions by embracing a genuinely multipolar foreign policy.
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