Geopolitical Tensions and Their Impact on Financial Stability in Iraq Prepared by: Assistant Lecturer Mohammed Abdulmunem Hamza : The escalation of geopolitical tensions in the region, particularly conflicts among international and regional powers, places the Iraqi economy under increasing pressure. This is largely due to its strong linkage to global markets and its heavy reliance on oil as the primary source of revenue. Any disruption in global energy markets or supply chains directly affects the country’s economic and financial performance. One of the most significant impacts is the volatility of global oil prices. Instability leads to fluctuations in public revenues, making it difficult to prepare accurate budget plans. Additionally, rising political risks contribute to higher financing costs and increased interest rates, placing a heavier burden on the government when resorting to borrowing to cover deficits. These tensions also affect the investment climate, as both local and foreign investors become hesitant to inject capital in the absence of stability. This results in reduced economic activity and lower growth rates. From an accounting perspective, this is reflected in declining recorded investments and reduced non-oil revenues. Moreover, supply chains are impacted by rising transportation and insurance costs, leading to higher import expenses and increased prices of goods in the local market. This contributes to inflation and weakens consumers’ purchasing power. From an accounting standpoint, these challenges increase pressure on government financial statements, widening the deficit gap and raising unplanned expenditures. This necessitates the adoption of more flexible fiscal policies and the implementation of effective control tools to regulate spending and enhance transparency.