US Halts Shipment of Iraqi Oil Dollars to Counter Iran-Linked Groups

US Blocks Shipment of $500m in Cash to Iraq’s Central Bank

The US Department of the Treasury has blocked a recent shipment of nearly $500 million in cash from being delivered to Iraq’s central bank, according to a report by The Wall Street Journal. The cargo plane carrying the funds was scheduled to arrive at the Federal Reserve Bank of New York, where it would be transferred to Baghdad.

The suspension of the shipment is part of a broader effort by the US to increase pressure on the Iraqi government to take action against powerful Iran-aligned groups operating in the country. According to officials cited by The Wall Street Journal, the move follows attacks claimed by these groups, which have targeted US military facilities and neighboring countries.

Iraq’s central bank has confirmed that it has sufficient US currency reserves, but did not comment directly on the halted deliveries. The US has been providing financial assistance to Iraq since the 2003 invasion, with billions of dollars in oil revenues being placed at the Federal Reserve Bank of New York for management.

The suspension of shipments is the second such delay this year, following a similar pause in February. US officials have stated that the suspension is temporary and will be lifted once certain conditions are met. Prime Minister Mohammed Shia al-Sudani has been seeking US support for his re-election bid while also navigating tensions with Iran-backed armed groups operating in Iraq.

The move reflects the ongoing efforts by the US to influence Baghdad’s financial system and access to its oil wealth, a practice that critics have long argued gives Washington significant leverage over Iraq.

Source: Al Jazeera