US Suspends Iraq Dollar Shipments Amid Pressure on Iran-Linked Groups

The United States has halted shipments of US dollars to Iraq and suspended parts of its security cooperation programmes with the Iraqi military, according to reports citing US and Iraqi officials.
 

The decision, first reported by The Wall Street Journal, includes the blocking of a cargo plane carrying nearly $500 million in US banknotes intended for Iraq’s central bank. The funds originated from Iraqi oil revenues held in accounts at the Federal Reserve Bank of New York.

US authorities are reportedly increasing pressure on Baghdad to reduce the influence of Iran-aligned armed groups operating within Iraq, particularly amid ongoing regional tensions linked to the wider conflict involving Iran and Israel.
 

The suspension marks the second delayed dollar shipment to Iraq’s central bank since the escalation of hostilities in the region earlier this year. Washington has also intensified its scrutiny of financial flows linked to Iraq’s oil revenues.
 

The policy shift comes amid continued attacks claimed by Iran-backed groups targeting US military positions in Iraq and neighbouring countries. In response, US forces have carried out airstrikes against several armed factions operating within Iraqi territory, some of which are linked to the Popular Mobilisation Forces, an umbrella organisation integrated into Iraq’s state security structure.
 

Iraq’s central bank has stated that it maintains sufficient foreign currency reserves, although it did not directly address the halted transfer in its latest statement.
 

Following the 2003 US-led invasion of Iraq, much of the country’s oil revenue system was placed under supervision through accounts managed in New York, a structure that has long been criticised for giving Washington significant influence over Iraq’s financial autonomy.
 

US officials have described the current suspension as temporary, but have not specified the conditions required for the resumption of dollar shipments.
 

The move adds further pressure on Iraqi Prime Minister Mohammed Shia al-Sudani, who has sought to balance relations with Washington while managing internal political tensions involving Iran-backed factions.