The Trump administration is pressuring Iraq to reduce economic ties with Iran while pushing for a crackdown on pro-Iranian armed groups. U.S. officials are using sanctions threats to influence Iraqi actions, reinforcing their strategy of maximum pressure on Iran. Iraq has taken steps to comply, including resuming oil exports from the Kurdish region and banning several banks from engaging in U.S. dollar transactions.
The Trump administration is exerting both economic and diplomatic pressure on Iraq to diminish its financial connections to Iran and lessen Iranian influence within the nation. U.S. officials are demanding that Baghdad halt the flow of U.S. dollars to Iran and take action against alleged Iraqi collaborations in Iran’s illicit oil exportation. Following U.S. prompting, Iraq has resumed oil exports from the Kurdish-controlled northern regions, which had been previously suspended.
The administration’s demands also encompass the use of sanctions to encourage Iraq to control pro-Iranian armed groups and ensure that they do not receive Iranian-supplied advanced weaponry. On February 4, a memorandum was issued outlining a strategy of maximum pressure to compel Iraq to sever economic ties with Iran, specifically prohibiting any financial transactions with Iran for energy supplies. This approach is part of a broader strategy to curb Iranian oil sales, particularly targeting sales to China.
Trump’s team has made it clear that they expect concrete steps from Iraq regarding the integration of Iran-aligned militia groups into Iraq’s official military structure, although military action against these groups remains a reluctant option. With a strategic alliance already established with Iraq, no sanctions toward Iraq’s energy sector have been indicated. The memorandum also emphasizes that U.S. sanctions waivers, previously granted under the Biden administration, will be rescinded, tightening financial restrictions on Iraq.
The U.S. continues to hold Iraqi banks accountable for their role in aiding Iranian financial activities, with the Secretary of State being directed to oversee efforts preventing this. Iraq has reacted favorably to the pressure, implementing a ban on several banks from engaging in U.S. dollar transactions. The Iraqi Central Bank is cooperating with this mandate as part of its broader strategy to combat money laundering and strengthen financial transparency.
Amid these sanctions-related developments, Iraqi officials are also taking proactive measures to assure that no licensed Iraqi entities assist in Iranian oil smuggling. They have publicly refuted allegations of energy trader collusion with Iran, emphasizing their compliance with international export standards. These claims come in light of earlier reports suggesting an extensive network of smuggling benefiting Iran financially.
Moreover, negotiations to ultimately resume oil exports from Kurdish areas, which had been stalled, are moving forward under U.S. pressure to expedite agreement. Iraq’s oil exports can potentially compensate for the reduction in Iranian oil exports; however, if Iran’s sales are significantly curtailed, northern Iraqi output may not fully cover the deficit. Trump administration goals aim to reduce Iranian oil exports drastically, which will pose challenges for the global oil market.
Additionally, the Trump administration has conveyed potential economic repercussions should Iraq fail to consolidate Iran-aligned militias under central government authority. Reports indicate that U.S. officials are advocating for the dismantling of militias associated with Iran’s Islamic Revolutionary Guard Corps. There is an acute focus on restricting further enhancements to armed groups supplied by Iran, particularly those capable of targeting U.S. assets.
In summary, the Trump administration’s strategy toward Iraq emphasizes reducing Iranian economic influence and promoting political alignment under Baghdad’s control. This includes a strict stance on financial transactions involving Iran and the integration of pro-Iran militia groups into Iraq’s official military framework. The outcomes of these policies may shape future U.S.-Iraqi relations and the dynamics of regional security.
Original Source: thesoufancenter.org
