Sources: America Threatens Iraq with Devastating Sanctions Over Iranian Influence

SadaNews - Sources have revealed that the United States threatened senior Iraqi politicians with sanctions that could affect the Iraqi state itself, including the potential targeting of its vital financial artery represented by oil revenues deposited through the Federal Reserve Bank in New York, should armed groups backed by Iran be included in the next Iraqi government.

According to four sources who spoke to "Reuters," this warning is one of the most severe examples to date of U.S. President Donald Trump's campaign to reduce the influence of Iran-linked groups inside Iraq.

Three Iraqi officials and a source familiar with the matter stated that the American warning has been conveyed repeatedly over the past two months by the U.S. Chargé d'Affaires in Baghdad, Joshua Harris, during discussions with Iraqi officials and influential Shia leaders, which included – through intermediaries – some leaders of Iran-linked groups.

Since taking office a year ago, Trump has sought to weaken the Iranian government and its regional arms, including through Iraq, which Tehran considers vital for maintaining its economy under sanctions.

U.S. and Iraqi officials stated that Iran has long used the Iraqi banking system to evade restrictions imposed on it.

Successive U.S. administrations have sought to stifle the flow of dollars, imposing sanctions on more than 10 Iraqi banks in recent years, but have never moved to stop dollar transfers from the Federal Reserve in New York to the Central Bank of Iraq.

In response to a request for comment, a U.S. State Department spokesperson told Reuters: "The United States supports the sovereignty of Iraq and the sovereignty of every country in the region. This means that there is no place whatsoever for Iran-backed militias that seek to pursue malevolent interests, fuel sectarian division, and spread terrorism throughout the region."

The spokesperson did not respond to Reuters' questions about threats to impose sanctions.

Political Escalation and Direct Pressure

In this context, the "Financial Times" reported that Washington is pressuring senior Iraqi politicians to form a government that excludes powerful armed groups backed by Iran, as part of the Trump administration's efforts to limit Tehran's influence in Baghdad.

According to the newspaper, recent weeks have seen tense meetings with Iraqi political leaders tasked with forming the government, where U.S. officials demanded a "credible" and swift plan to disarm these groups.

The newspaper quoted five individuals familiar with the talks as saying that Washington threatened punitive actions if this was not achieved, with three of them stating that the threats included "economic measures, including restricting cash dollar supplies sent to Iraq in exchange for oil sales."

U.S. Anger Following the Election of Fihyan

According to the "Financial Times," tensions escalated following the election of Adnan Fihyan, a former member of the Asa'ib Ahl al-Haq militia, as the first deputy speaker of parliament last month.

One source stated: "The American embassy exploded with anger. They told us that this is hostile behavior and an act of defiance... and demanded his replacement."

This came at a time when senior Iraqi politicians were engaged in intensive consultations to form a new government following elections that strengthened the influence of Shia paramilitary groups.

The process of forming the government is led by the "Coordination Framework" alliance, which includes factions and militias classified by the U.S. as terrorist organizations and holds the largest share of parliamentary votes.

Iranian Influence and Economic Pressure

Despite the reduced public presence of fighters, these groups still enjoy wide influence within state institutions, amid allegations of corruption, seizing official institutions, and exercising violence.

The Asa'ib Ahl al-Haq is among the most influential of these groups, having been sanctioned by Washington last October for helping Iran evade sanctions, despite its attempts to reintroduce itself as a political force and its previous ministerial representation.

The newspaper reported that Washington halted meetings with its allies who voted for Fihyan, and provided a list of deputies "they do not want to see in the government," while also threatening to cut off dollar supplies to Iraq, which one insider described as a "nuclear option."

One source said: "They said that if we do not meet their demands, then America will not be willing to help Iraq."

Partial Response

The newspaper indicated that these threats, along with fears of a potential military move by the U.S. and Israel, prompted some Iraqi politicians to partially comply.

One source said: "It is better to concede in this matter rather than something else," referring to the willingness of the Coordination Framework and Asa'ib Ahl al-Haq to replace Fihyan.

However, the issue of disarmament remains the most sensitive, as militias reject giving up their arms, considering them "essential for defending Iraq." The Coordination Framework proposed a gradual plan over two years after forming the government, but Washington demanded immediate action.