Trump Administration Intensifies Pressure on Iraq to Cut Ties with Iran

The Trump administration is exerting economic and diplomatic pressure on Iraq to limit ties with Iran, aiming to reduce Iranian influence and financial transactions. Following U.S. pressure, oil exports from northern Iraq have resumed, while threats of sanctions aim to compel Baghdad to address Iranian-aligned militias. The recent National Security Presidential Memorandum outlines these directives, focusing on halting U.S. dollar flows to Iran and maintaining Iraqi financial accountability.

The Trump administration is intensifying economic and diplomatic pressure on the Iraqi government to diminish its financial connections with Iran and mitigate Iranian influence in Iraq. Officials from the Trump administration are urging Baghdad to stop the outflow of U.S. dollars to Iran and to take decisive action against purported cooperation with Iranian oil exports.

In response to pressure from the Trump administration, Iraq’s Arab and Kurdish leaders have recommenced oil exports from the Kurdish region, which had been paused. U.S. officials are employing the potential for sanctions as leverage to compel Baghdad to control pro-Iranian militia factions and restrict their access to sophisticated arms sourced from Iran.

On February 4, the Trump administration explicitly delineated its strategy to diminish Iraqi financial connections to Iran in the “National Security Presidential Memorandum/NSM-2.” This memorandum emphasizes the intent to prevent any financial latitude that could benefit Iran, particularly regarding U.S. dollar transactions and payments for essential energy supplies from Iran.

The memorandum mandates U.S. officials to thwart Iraqi dollar exchanges with Iran and prevent Iranian revenue from electricity and gas supply. Washington anticipates that reopening the oil pipeline from Kurdish-controlled areas to Türkiye could partially substitute for reduced Iranian oil sales to China.

Trump’s advisors are calling for comprehensive oversight of Iran-aligned militia groups in Iraq, advocating for their integration into the national military structure or their complete disbandment. Nevertheless, Trump appears hesitant to resort to military action against these groups unless they initiate attacks against U.S. personnel stationed in Iraq.

The presidential memorandum includes stipulations that call for accountability from Iraqi banks that do not impede the channeling of dollars to Iranian entities. The Secretary of State is tasked with ensuring that sanctions are not evaded through the Iraqi financial system or by using Gulf nations as transshipment points for Iranian goods.

In light of U.S. sanctions warnings, Iraqi authorities have taken measures to limit currency transactions that could aid Iran. The Central Bank of Iraq has enacted bans on five more banks involved in dollar transactions to curb violations benefiting Iran. In 2024, the Iraqi Central Bank had already restricted eight banks from such transactions.

Iraq’s Oil Ministry has responded to anticipated pressures by ensuring no Iraqi entities are engaging in illicit oil exports for Iran. They asserted that Iraqi oil is sold transparently to reputable international companies. This statement coincided with allegations concerning a fuel smuggling network for Iran that purportedly generated substantial funds for Iran and its militias.

In conclusion, the Trump administration is significantly increasing its pressure on Iraq to sever economic ties with Iran and address the influence of Iranian-aligned militias. Key measures include restricting financial transactions with Iran, reviving oil exports from Kurdish regions, and demanding stronger governmental control of militia groups. These actions reflect a strategic approach to curtail Iranian power in the region while emphasizing accountability from both Iraqi officials and financial institutions.

Original Source: thesoufancenter.org