A plane carrying nearly $500 million in US banknotes from Iraq’s oil revenues was blocked by the US Treasury, halting shipments of US dollars to Iraq and pausing some security cooperation programs with the Iraqi military. The move is seen as increasing pressure on Baghdad to curb powerful Iran-aligned groups amid ongoing tensions between the US and Iran. This suspension marks the second delayed dollar shipment to Iraq’s central bank since the US-Israel war on Iran began in late February. Prime Minister Mohammed Shia al-Sudani, seeking US support for a second term, has been navigating between US interests and Iran-backed armed groups in Iraq.
Why It Matters
Following the 2003 US-led invasion of Iraq, the US controlled Iraq’s oil revenues by placing billions of dollars in proceeds at the Federal Reserve Bank of New York, giving Washington significant influence over the country. Halting the dollar shipments underscores the complex dynamics between Iraq, the US, and Iran, with Baghdad caught in the middle of regional power struggles. The move reflects Washington’s efforts to push Baghdad to align more closely with US interests and reduce ties with Iran-aligned groups, signaling potential shifts in Iraq’s geopolitical positioning.
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