Iraq

The 12-month probability of a new armed-conflict onset in Iraq is 18.0%, a high risk. Iraq’s history of civil war, insurgency, sectarian violence, foreign intervention, and powerful armed factions leaves institutions vulnerable to renewed domestic violence. Limited state control over security actors, dependence on oil revenues, and exposure to regional rivalries further support the risk level.

Recent reporting highlights increased pressure from Iran-linked groups and Kurdish Iranian opposition factions inside Iraq, alongside continuing efforts by militias to shape the country’s security order. Cabinet appointments may improve governmental coordination but have also raised concerns about Iranian influence. Iran-related disruption has reportedly cost Iraq about $60 billion in lost oil revenues. Prediction markets separately imply 78.0% for Iran targeting Iraq by October 22 and 8.2% for Israeli military action by October 31.

The largest uncertainty is whether external confrontation remains indirect or produces sustained fighting on Iraqi territory. Risk would rise if Iran, Israel, or affiliated armed groups conducted repeated attacks in Iraq, or if Iraqi militias openly challenged state authority. Risk would fall if Baghdad contained militia activity, protected opposition groups, and sustained credible diplomatic efforts to keep Iraq outside the regional war.