Iraq has devalued the dinar, raising the official rate from 1,320 to 1,520 per US dollar after the cabinet approved the change on Tuesday 6 October 2026, according to Al Jazeera. Banks and exchange companies began selling dollars at the new rate on Wednesday. The Iraq dinar devaluation follows a collapse in oil exports linked to the war on Iran and disruption to the Strait of Hormuz, the report says.
Oil pays more than 90% of the federal budget, Al Jazeera reports. Exports, mostly routed through Hormuz, fell by as much as 90% at one point and were 2.34 million barrels a day in August against a pre-war average of 3.6 million. Prime Minister Ali al-Zaidi said Iraq lost about $60bn in oil revenue, and Central Bank of Iraq reserves fell from about $106bn to roughly $80bn by late August. The 2027 budget plans spending of 217 trillion dinars (about $166bn) with a deficit above 40 trillion dinars (about $30bn). The central bank called the move a strategic step to steady finances.
The political backlash
Dozens of MPs said parliament was not told how or why the decision was made, and one called it “waging war on the poor”, per Al Jazeera. Parliament cancelled its Wednesday agenda to debate the issue, and the finance minister and central bank governor were due to appear on Thursday. The outcome of that session was not in the report.
What it means for households and traders
Imports cover much of Iraq’s food, medicine and industrial inputs, so a weaker dinar raises costs. Most Iraqis cannot buy dollars at the official rate and pay the parallel-market price, which rose after the change, widening the gap, according to the report. For an exporter such as a Vietnamese food producer selling into Iraq, a lower dinar value can make prices in local currency harder to sustain and raise payment risk, so contract currency and payment terms matter.
What to watch
Watch the parliamentary review, the gap between official and parallel rates, and oil flows. Broader markets are reacting to the same shock: investinglive reported on 5 October that Brent was near $102 and that G7 countries had announced a 100 million barrel emergency stock release. Our coverage: Gulf oil price shock and the Strait of Hormuz dispute.
Iraq dinar devaluation: questions
What is the new official rate?
1,520 dinars per dollar, up from 1,320.
When did it take effect?
Banks and exchange companies began selling dollars at the new rate on Wednesday 7 October 2026, per Al Jazeera.
Why was the dinar devalued?
Falling oil revenue after Hormuz disruption and a large budget deficit, according to the report.
Who opposes it?
Dozens of MPs, who say parliament was not consulted.
Will prices rise?
Al Jazeera reports imports become more expensive, which feeds through to food and medicine costs.
US stocks slid on Wednesday as Treasury yields climbed to their highest levels in more than 20 years and oil stayed volatile on renewed Iran war fears, according to Al Jazeera. Wall Street closed lower a day after the Nasdaq and S&P 500 both hit record highs.
Investors worried that high oil prices would push up inflation and interest rates, driving a selloff in bonds, Al Jazeera reports. The article does not give index levels or percentage moves for the session.
Oil: Brent above $100
Oil rose Wednesday on Middle East supply concerns, then fell after the International Energy Agency said members “stand ready to release additional oil from their reserves if necessary”, with diesel prioritised. By 01:16 GMT on Thursday, Brent was at $101.53 a barrel and US WTI at $89.39. G7 countries and the IEA agreed on 3 October to release 100 million barrels of diesel and crude.
Tanker attacks in the Gulf
The UK Maritime Trade Operations agency (UKMTO) said nine tankers were attacked in the Strait of Hormuz in October so far, half of September’s total for the strait and wider Gulf. On Wednesday it also reported a tanker struck by multiple projectiles about 94 km north of Madinat ash Shamal, in Qatar’s exclusive economic zone, with casualties reported but no numbers given, per Al Jazeera. Qatar had not commented. See the agency’s own notices at UKMTO.
Supply is not stopped
Kpler data cited by Al Jazeera shows Gulf oil flows, excluding Iran, recovered to over 81% of pre-war levels in September, and Middle East crude exports hit 18.3 million barrels a day on 30 September, above the 12-month pre-war average of roughly 18 million. US Secretary of State Marco Rubio has said Washington controls the strait and flows are near normal, a claim made by a party to the conflict.
Markets and oil: questions answered
Why did US stocks fall on Wednesday?
Al Jazeera links the fall to bond-market worries: high oil prices could lift inflation and interest rates, pushing yields to over-20-year highs.
What was the Brent price?
$101.53 a barrel at 01:16 GMT on Thursday 8 October; WTI was $89.39.
What are the G7 and IEA doing?
They agreed on 3 October to release 100 million barrels of diesel and crude, and the IEA says it can release more.
Is oil still flowing from the Gulf?
Yes, per Kpler data, though shipping attacks continue.
Saudi Arabia has shut down the Saudi East-West pipeline, the 1,200-kilometre artery it uses to move crude from its eastern oilfields to the Red Sea, after a series of drone attacks launched from Iraq. The closure removes the kingdom’s main insurance policy against disruption in the Gulf at precisely the moment that insurance is most needed.
CNBC reported that the shutdown was precautionary, taken after drones struck the line in the Riyadh and Medina regions on Thursday morning, starting fires and causing some damage. Riyadh has not published a damage assessment or a restart date.
Why this particular pipeline matters
The East-West line carries up to 7 million barrels per day from Abqaiq in the east to the Yanbu terminal on the Red Sea. Its entire strategic purpose is to let Saudi crude reach world markets without passing through the Strait of Hormuz.
That mattered little for most of the past decade. It matters enormously now. With the United States and Iran contesting control of Hormuz, Saudi Arabia had been leaning on the East-West route to keep exports flowing westward. Closing it narrows the kingdom’s options to the very chokepoint it was built to bypass.
The timing compounds an already tight picture. Houthi forces took Yemen’s Red Sea coast last week, tightening their grip on the Bab al-Mandab Strait at the southern end of the same sea lane — a development we covered in our report on the fall of Mocha. A tanker leaving Yanbu now sails south toward contested water.
What the attack says about the conflict’s shape
The drones came from Iraq, not Yemen. That is a meaningful shift. Attacks on Saudi energy infrastructure have historically originated from Houthi-held territory to the south; an Iraqi launch point opens a second axis and puts central Saudi Arabia — Riyadh and Medina are far inland — within reach.
No group had claimed responsibility at the time of the initial reports. Al Jazeera’s account situates the strike within the wider Iran-aligned campaign that has intensified since American strikes inside Iran, including the recent attack on Kermanshah.
It also follows Houthi strikes on the kingdom earlier in the same week, which hit energy facilities and civilian assets. The pattern that emerges is not a single spectacular attack of the kind that took Abqaiq offline in 2019, but repeated smaller strikes on dispersed targets. That is harder to defend against and harder to price, because each individual hit is survivable while the cumulative effect on operating decisions is not.
The price response
Crude broke above $100 a barrel for the first time in months, with Brent trading above $107 on Friday. Prices finished the week more than 8% higher.
Two things are worth separating here. The first is the physical loss: a closed pipeline is barrels that cannot move on a particular route, not barrels that cease to exist. The second is the risk premium: traders are pricing the possibility that the next strike hits something harder to replace. Most of the move is the second thing.
That distinction matters for how long the price holds. If the line restarts within days and no further infrastructure is hit, the premium deflates. If attacks continue on a second front, it does not.
Where the cost lands
Higher crude reaches consumers through fuel, freight and the price of anything that moves. It has already begun feeding official data — US wholesale prices rose 0.4% in August on the back of energy, as set out in our coverage of that release.
Oil-importing economies absorb the hit most directly. Countries that subsidise fuel face a widening bill on top of the import cost, which turns an energy shock into a fiscal one.
Central banks face the familiar bind. An energy-driven price rise is a supply shock, and textbook practice is to look through it. Looking through it is harder when inflation is already running above target and a second shock arrives before the first has faded.
What to watch from here
Three signals will tell you which way this resolves.
A restart announcement. Saudi Aramco confirming the line is back would take the sharpest edge off the premium.
Whether Iraq-launched attacks repeat. One strike is an incident. A pattern is a new front, and prices will treat it that way.
Hormuz traffic counts. With the western route closed, Gulf transit volumes become the single best read on how much Saudi crude is actually reaching buyers.
Questions readers are asking
How much oil does the East-West pipeline normally carry?
Its capacity is about 7 million barrels per day, though it typically runs well below that. Actual throughput before the shutdown has not been disclosed.
Does the shutdown mean Saudi exports have stopped?
No. It closes one route. Crude can still be exported through Gulf terminals, but those cargoes must transit the Strait of Hormuz, which is the risk the pipeline existed to avoid.
Who launched the drones?
The drones were launched from Iraq. No group had claimed responsibility in the initial reporting, and Saudi authorities have not formally attributed the attack.
Will petrol prices rise?
Pump prices follow crude with a lag of roughly two to four weeks in most markets, and the pass-through depends heavily on local taxes and any subsidy. A sustained move above $100 would show up at the pump; a brief spike may not.
How long can the pipeline stay offline?
That depends on damage the kingdom has not disclosed. Precautionary shutdowns after limited damage have historically been measured in days, but no restart timeline has been given.
For the wider picture on how this conflict is reshaping trade routes and energy prices, see our continuing coverage of Red Sea shipping and the inflation data.
Iran US military strikes resumed on 31 August 2026. The clash ended a five-week pause in direct fighting between Washington and Tehran. Iran’s Islamic Revolutionary Guard Corps said it launched missiles and drones at the King Hussein and Al Azraq air bases in Jordan overnight. The attack came hours after the US military struck an Iranian-held position on Larak Island in the Strait of Hormuz. It marks the first confirmed clash between the two countries since a truce held through most of August.
What happened in the latest round of Iran US military strikes
Jordan’s military disputed Iran’s account of the damage. Officials in Amman said air defenses intercepted eight ballistic missiles before any could reach infrastructure or personnel. They reported no casualties. The United Arab Emirates’ Ministry of Defense separately said it shot down a drone launched from Iranian territory toward Emirati airspace. Iran’s state media claimed “heavy damage” to maintenance facilities and aircraft positions at the two Jordanian bases. Jordan rejected that claim outright.
A senior Iranian source told Reuters that Tehran would respond to any American strike “dozens of times greater.” That language suggests further escalation, not a one-off retaliation. US President Trump said the United States was prepared to “hit them hard” if the attacks continued, CNBC reported.
Why the strikes restarted after a five-week lull
The renewed fighting follows a pattern set earlier in the summer. US and Saudi forces struck militia positions in Iraq. Iran responded with missiles aimed at American bases in the region. That July exchange ended with a Pakistan-mediated ceasefire and a memorandum of understanding. Both sides have since accused the other of violating that agreement. The weekend strike on Larak Island appears to have broken the truce entirely.
Energy markets are already pricing in the risk. Middle East hostilities keep pushing oil prices higher. Traders have pushed up expectations for a European Central Bank rate move later this month as a result. That dynamic ties this conflict directly to inflation readings far outside the region.
Who is bearing the direct risk from Iran US military strikes
Jordan and the UAE are absorbing the retaliatory fire. Both are US security partners, but neither is a direct party to the underlying dispute. Jordanian officials have repeatedly stressed that intercepting missiles over populated areas carries its own risk. Falling debris can still cause casualties even when interceptions succeed. Gulf carriers have also begun rerouting some flights away from Iranian and Iraqi airspace, echoing disruptions seen in July. Regional tourism boards have started fielding cancellation questions from travelers who booked trips for the coming weeks, even in countries well outside the immediate strike zones.
How markets are reading the new round of Iran US military strikes
Oil traders pushed benchmark prices higher within hours of the Larak Island strike becoming public. The move extends a rally that began with the June flare-up in hostilities. That earlier spike helped push the European Central Bank to raise its deposit rate for the first time in three years. Traders are now watching whether a second summer of Middle East volatility forces the Federal Reserve and the Bank of England to follow suit. Airlines flying between Europe and Asia have had to recost fuel-hedging positions twice in three months. That cost eventually shows up in ticket prices.
Insurance underwriters covering Gulf shipping routes raised war-risk premiums again after the weekend strikes. Higher premiums on tankers moving through the Strait of Hormuz tend to feed into fuel costs within weeks. That is one reason economists are treating this as more than a regional story.
What happens next
Diplomats involved in the earlier ceasefire talks are reportedly trying to reconvene. No date has been confirmed. Analysts widely expect at least one more exchange of strikes before either side agrees to de-escalate again, based on the pattern from July. Oil markets, Gulf aviation schedules, and the European Central Bank’s inflation outlook will likely move in step with whatever happens next. Regional carriers say they will keep reviewing flight paths daily rather than commit to a fixed routing until the situation stabilizes.
Frequently Asked Questions
Did the latest Iran US military strikes cause any confirmed casualties?
Jordan’s military reported no casualties from the intercepted missiles, and the UAE reported none from the drone it shot down. Iran’s own casualty figures, if any, have not been independently confirmed.
What triggered this round of fighting?
The US military struck an Iranian-held position on Larak Island in the Strait of Hormuz over the weekend of 29-30 August 2026. Iran responded with strikes on bases in Jordan and a drone toward the UAE.
Is this connected to the July 2026 ceasefire?
Yes. Both countries have accused each other of violating the Pakistan-mediated ceasefire and memorandum of understanding reached after the July exchange, and this weekend’s strikes appear to have ended that truce.
How is this affecting travel and energy markets?
Some Gulf carriers have rerouted flights away from Iranian and Iraqi airspace, and oil prices have risen on the renewed hostilities, feeding into inflation expectations at central banks including the European Central Bank.
The United Arab Emirates has suspended all trade with Iran, closing one of Tehran’s most important commercial channels, after the Strait of Hormuz tanker attacks that Abu Dhabi blames on Iranian forces. The Emirati foreign ministry said on 19 August that “all trade, commercial exchanges and financial transactions with Iran have been halted until further notice”. The statement followed an announcement by the UAE defence ministry that its air defences had detected two ballistic missiles fired from Iran the previous day. Iran denies launching them and has not claimed responsibility for the shipping attacks.
The rupture ends a commercial relationship that survived decades of sanctions and diplomatic estrangement, and it comes at a moment when the world’s most important oil corridor is only partly functional.
What the Strait of Hormuz tanker attacks involved
The Abu Dhabi National Oil Company, ADNOC, said two of its vessels were attacked while transiting the strait on the evening of Thursday 13 August, and that the situation was subsequently “brought under control”. No injuries were reported. In a statement issued in the early hours of the following morning, the UAE Ministry of Foreign Affairs said it “strongly condemned and denounced the hostile Iranian attack that targeted two vessels affiliated with ADNOC as they transited the Strait of Hormuz”.
It was the second such incident in under a week. On Saturday 8 August the UAE reported an attack on a separate ADNOC tanker, which it attributed to Iran’s Islamic Revolutionary Guard Corps. Iran did not comment on either episode.
ADNOC has said that 15 of its vessels have been attacked while transiting the waterway since the United States and Israel began their war on Iran in February. The Emirati foreign ministry described Iranian attempts to use the strait as a tool of economic coercion as “piracy” and a “direct threat to the stability of the region, its peoples, and the global energy supply”. Full detail on the incident is in Al Jazeera’s report on the attacks.
Why Abu Dhabi severed commercial ties with Tehran
The trade suspension was triggered by a separate incident five days later. On Tuesday 18 August, the UAE defence ministry said it had detected two ballistic missiles launched from Iran, one of which fell outside Emirati territorial waters and one inside them. In a follow-up statement the ministry said the missiles had been “targeting maritime traffic” and pledged to “resolutely confront any attempt to undermine the security of the nation or maritime navigation in the region”.
Iran’s foreign ministry rejected the accusation as “baseless”. Its spokesman, Esmaeil Baghaei, suggested the episode was a “false flag operation” and said the claim “contradicts the principle of good neighbourliness”, urging regional governments to weigh what he called the “malicious actions” of the United States and Israel.
Abu Dhabi announced the embargo the following morning, citing “escalations that undermine peace and security in the region”. It was the first missile strike aimed at the UAE since May, according to Al Jazeera, and it came a day after a 60-day window for US-Iranian talks expired without a breakthrough. In the first six weeks of the war, Iran directed more fire at the UAE than at any other Gulf state, launching more than 530 ballistic missiles, dozens of cruise missiles and more than 2,200 drones at what it described as US assets.
The commercial stakes are unusually high. Mark Kimmitt, a retired US general and former assistant secretary of state, told Al Jazeera that Dubai had quietly become Iran’s most important trading partner, ahead of both China and Turkey, supplying roughly a third of everything Iran imports each year. “In many ways, the embargo being put on by the UAE is even more significant than the embargo being put on by the United States,” he said. Dubai’s standing as a financial centre, he added, has long given Iranian entities a discreet route around international sanctions.
The UAE had already suspended direct cargo shipping with Iran in early March, days after the war began, before resuming it in late June through Dubai’s Jebel Ali Port. Companies operating in the Emirates have spent much of 2026 adjusting to shifting compliance rules; anyone weighing corporate structures there may find our guide to choosing between a UAE free zone and a mainland company a useful starting point.
The waterway at the centre of the dispute
The Strait of Hormuz is the only sea route between the Gulf and the open ocean, which makes it the most consequential chokepoint in the oil trade. Iran has maintained what Al Jazeera describes as an effective blockade of the waterway and has sought to charge vessels for passage. Washington rejects that proposal outright and has imposed a counter-blockade on Iranian ports, with President Donald Trump signalling a shift towards economic rather than military pressure.
Iran has been negotiating separately with Oman over arrangements for managing the strait. In early August, Iranian officials said a framework had been reached with Muscat on a proposed shipping route, though the arrangement had not resolved the underlying dispute with Washington by the time the ADNOC vessels were hit.
Payment and settlement channels have tightened alongside the physical ones. The compliance squeeze on cross-border money movement has been felt well beyond the Gulf this year, as the shutdown of the Noones platform under EU sanctions illustrated for retail users.
Where the standoff goes from here
Three variables will determine whether the rupture hardens. The first is whether other Gulf states follow. Kimmitt told Al Jazeera he expects a “wait-and-see” approach from the UAE’s neighbours rather than immediate imitation, even if Iranian attacks continue.
The second is Tehran’s reading of the measure. Kimmitt said Iran could interpret a near-total commercial cut-off as bordering on an act of war, a framing that would raise rather than lower the risk to shipping.
The third is the Hormuz negotiation itself. If the Iran-Oman framework produces a functioning transit arrangement, pressure on shipping may ease and the political cost of the embargo falls mainly on Tehran. If it collapses, the UAE will be enforcing a trade ban while its own tankers remain exposed in the same stretch of water.
Neither government has set out a route back. The Emirati statement placed no time limit on the suspension, and Tehran’s flat denial leaves little face-saving room. For businesses with exposure on both sides, the immediate questions concern licensing, banking access and residency; our explainer on the UAE golden visa for business owners sets out how the residency side currently works.
Frequently asked questions
What are the Strait of Hormuz tanker attacks?
They are a series of missile and drone strikes on commercial shipping passing through the Strait of Hormuz. The UAE says two vessels linked to the Abu Dhabi National Oil Company were hit on the evening of 13 August 2026, days after a separate ADNOC tanker was struck on 8 August. Abu Dhabi blames Iran. Tehran has not claimed responsibility and has not commented on the incidents.
How many ADNOC ships have been attacked?
ADNOC has said 15 of its vessels have been attacked while transiting the Strait of Hormuz since the United States and Israel began their war on Iran in February 2026.
What exactly did the UAE suspend?
The UAE Ministry of Foreign Affairs said on 19 August 2026 that all trade, commercial exchanges and financial transactions with Iran had been halted until further notice. No end date was given.
Why does the trade ban matter so much to Iran?
Mark Kimmitt, a retired US general and former assistant secretary of state, told Al Jazeera that Dubai supplies roughly a third of everything Iran imports each year and has long provided a discreet route around international sanctions.
Has Iran responded to the accusations?
Yes. Iran’s foreign ministry spokesman, Esmaeil Baghaei, called the missile allegation baseless and suggested it was a false flag operation. Iran has separately declined to comment on the attacks on ADNOC vessels.
Is the Strait of Hormuz open?
Only partially. Iran has maintained an effective blockade and has sought to charge vessels for passage, while the United States has imposed a counter-blockade on Iranian ports. Iran and Oman have been negotiating a framework for shipping routes through the waterway.
Tamara News continues to follow the Gulf shipping crisis and its commercial consequences. Related coverage on regional business rules and cross-border payments is linked throughout this report.
