U.S. Suspends Security Cooperation and Dollar Shipments to Iraq Amid Rising Tensions with Iran-Backed Militias

The United States has intensified its pressure on Iraq by suspending key elements of security cooperation and halting shipments of U.S. dollars tied to the country’s oil revenues. This decision, confirmed by Iraqi officials, is aimed at compelling Baghdad to form a new government devoid of Iranian influence and to arrest militia members accused of attacking U.S. diplomatic and military targets. The U.S. has linked the resumption of financial flows and intelligence cooperation to these conditions, highlighting Washington's growing impatience with Iraq's political paralysis and the influence of Iran-backed militias.

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Iraq has been in a state of political deadlock for over five months following national elections in November 2025. The Shiite Coordination Framework, a coalition of pro-Iran factions, has struggled to agree on a prime ministerial candidate. Nouri al-Maliki, a former prime minister, and current Prime Minister Mohammed Shia al-Sudani are among the leading candidates, but U.S. opposition to Maliki due to his ties with Tehran complicates the situation. The ongoing inability to form a government has created an opening for external actors, particularly the U.S., to exert influence.

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Iran has granted its commanders greater autonomy over militias in Iraq, allowing them to operate independently, which has raised concerns among U.S. officials. These militias, funded through the Iraqi state budget and embedded within the security apparatus, have been accused of escalating attacks on U.S. assets in Iraq. The U.S. has responded by imposing sanctions on militia leaders and suspending security cooperation, which includes critical counterterrorism actions against groups like the Islamic State.

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Tommy Pigott, the State Department deputy spokesman, stated, “The United States will not tolerate attacks on U.S. interests and expects the Iraqi government to immediately take all measures to dismantle the Iran-aligned militia groups in Iraq.” This sentiment underscores the U.S. commitment to curbing the influence of these militias, which are seen as extensions of Iran’s regional strategy.

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Critics argue that the U.S. strategy may exacerbate Iraq's political instability. The suspension of dollar shipments risks amplifying financial strain and public discontent in an economy heavily reliant on oil revenues. Additionally, overt U.S. pressure could harden the positions of Iran-aligned factions, complicating efforts to reach a political compromise.

US halts security ties, dollar flows to Iraq in pressure over militias

While the U.S. has suspended security cooperation and dollar shipments, some Iraqi officials suggest that discussions are ongoing and that the decision is not final. This indicates a potential gap in communication regarding the U.S. strategy and its implications for Iraq's political future.

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As negotiations continue, the situation remains fluid. The U.S. is expected to maintain its pressure on Iraq to ensure a government formation that aligns with its interests, while Iraq navigates the complex dynamics of its relationships with both the U.S. and Iran. The outcome of these negotiations will significantly impact Iraq's political landscape and its ability to manage the influence of Iran-backed militias.

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