U.S. Halts Iraq Dollar Shipment And Security Aid Over Iran-Backed Militias
The U.S. has blocked shipments of dollars and paused security aid to Iraq to squeeze Iran-backed militias.
The move, reported by the Wall Street Journal, is aimed at pressuring Baghdad to limit militia activity and sever militia ties with Iran. Officials warn the step could complicate U.S.-Iraq security cooperation and counterterrorism efforts while increasing political strain in Baghdad.
This action reflects growing U.S. frustration with Iraqi leaders' inability to control Iran-backed armed groups, and it signals a shift from diplomatic pressure to financial coercion. How Baghdad will respond is unclear, and the pause in aid may push Iraq closer to Tehran or prompt concessions to Washington.
📌 Key Facts
- Treasury Department recently blocked a cargo-plane delivery of nearly $500 million in U.S. banknotes destined for Iraq
- The cash represented proceeds from Iraqi oil sales held in accounts at the Federal Reserve Bank of New York
- The Trump administration also froze U.S. security cooperation programs with Iraq's military to pressure Baghdad over Iran-backed militias
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