By emmitt barryWorthy News Washington DC Bureau Chief
(Worthy News) – The Trump administration has halted shipments of US dollars to Iraq and suspended parts of its security cooperation with Baghdad, increasing pressure on Iraqi leaders to confront powerful Iran-backed militias, according to an exclusive report by The Wall Street Journal citing US and Iraqi officials.
A planned delivery of approximately $500 million in US currency derived from Iraqi oil revenues held at the Federal Reserve Bank of New York was recently blocked by the Treasury Department. The move marks the second delay in dollar transfers to Iraq’s central bank since the US-Israeli war with Iran began in late February, The Wall Street Journal reports.
The financial pressure comes amid an increase in militia attacks targeting US personnel and facilities in Iraq and across the region. Officials say Washington has also halted funding for some counterterrorism and military training programs unless Baghdad takes concrete steps to dismantle armed groups linked to Tehran.
Despite the suspension, Iraq’s central bank insisted it was not facing a shortage of US currency, saying it had met demand from financial institutions. Nevertheless, the US retains significant advantages: since the 2003 invasion, Iraqi oil revenues have been held in US accounts, with billions of dollars of cash regularly flowing into Baghdad to support the largely cash-based economy.
State Department spokesman Tommy Pigott warned that Iraq’s failure to stop militia attacks was straining bilateral relations. He called on Iraqi authorities to take immediate action against Iran-aligned groups, saying, “The United States will not tolerate attacks on American interests.”
Iran-backed militias—including Kataib Hezbollah and Asaib Ahl al-Haq—have carried out hundreds of drone and rocket attacks since the conflict with Iran began, according to officials cited by the Wall Street Journal. Many of these groups wield significant political and economic influence inside Iraq, complicating efforts by Prime Minister Mohammed Shia al-Sudani to curb their power as the country moves toward a sensitive leadership transition.
Analysts say the US actions indicate growing frustration in Washington, but also highlight the limits of American influence. “The decision to halt dollar shipments and security cooperation is a strong signal of America’s displeasure,” a former US official told the Wall Street Journal. He warned that quickly destroying Iraq’s deeply entrenched militia networks could prove difficult.
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