IRAQ AND THE APPEASEMENT STRATEGY: A DIFFICULT BALANCE IN TIMES OF PRESSURE, 3 APRIL

 IRAQ AND THE APPEASEMENT STRATEGY: A DIFFICULT BALANCE IN TIMES OF PRESSURE

Iraq has recently faced a significant escalation in US economic and financial pressure, primarily targeting dollar transactions and Iranian gas imports, along with repeated demands regarding the future of the Popular Mobilization Forces. These pressures come as part of Washington’s efforts to isolate Iraq economically from Iran, with the aim of strengthening the effectiveness of sanctions imposed on Tehran to force it to reassess its nuclear program.

However, this policy presents Iraq with complex challenges as it attempts to maintain a delicate balance in its foreign relations.

Recent reports indicate that the United States has refused to renew the waivers that allowed Iraq to import gas and electricity from Iran. This was confirmed by Iraqi Foreign Minister Fuad Hussein on March 19, 2025, who noted that Washington described the decision as “irreversible.”

This decision threatens to exacerbate the energy crisis in Iraq, which relies heavily on Iranian gas to power its power plants. Imported gas accounts for approximately 40% of the country’s total energy needs, according to estimates from the Iraqi Parliament’s Oil and Gas Committee.

On the financial front, the United States is seeking to restrict dollar transactions in Iraq to prevent its smuggling to Iran, which is suffering from massive economic pressures due to sanctions. According to a report, Washington believes that cutting off these financial arteries will directly weaken Tehran, thus strengthening the impact of the sanctions.

But this approach places the Iraqi government in a difficult position, as Iraq holds financial reserves exceeding $100 billion in the United States, making it dependent on Washington’s goodwill to access its oil revenues.

(This is why the U.S. won’t transfer the remaining DFI funds to Iraq and keep renewing exec order 13303. See it now?)

Separately, statements by the Iranian ambassador to Baghdad, Mohammed Kazem Al-Sadiq, on March 27, 2025, sparked widespread controversy when he said that US President Donald Trump’s letter to Iranian Supreme Leader Ali Khamenei included a request to dissolve the Popular Mobilization Forces and other armed factions.

However, Iraqi Prime Minister Mohammed Shia al-Sudani quickly denied any direct US request in this regard, stressing that any decision to dissolve the factions is linked to the end of the international coalition’s presence in Iraq.

For his part, MP Alaa Al-Haidari defended the Popular Mobilization Forces Law, considering it an internal matter aimed at honoring those who sacrificed for the nation.

The Iraqi government is adopting a strategy of appeasement in its foreign policy, attempting to maintain a balance between the United States and Iran, two of its historical allies. However, this approach faces increasing challenges, especially with mounting US pressure to end economic and military coordination with Tehran. Analysts believe that Washington also aims to “undermine the unity of the arenas,” the strategy Iran uses to connect its fronts in Iraq, Syria, Lebanon, and Yemen.

Economically, Iraq is paying the price for its heavy reliance on Iran for energy. Iraqi lawmakers have called for exploring alternatives, such as Qatar and Turkey, for gas imports. However, this step requires huge investments and a long-time frame, both of which may be unavailable given the current crisis. Conversely, experts believe that economic decoupling between Baghdad and Tehran could increase pressure on Iran, but it could also cause internal unrest in Iraq, especially if the electricity crisis worsens.