Introduction: The Stakes Are High for Iraq
A recent report by Al-Sharq Economic (Jan 29, 2026) reveals the economic pressure points US President Donald Trump could deploy to “undermine” Nouri al-Maliki’s return as Iraq’s prime minister.
Trump’s message is clear: if Maliki, known for his pro-Iran leanings, assumes power, US aid could be cut, oil revenues restricted, and Iraq’s financial stability challenged — potentially impacting the Iraqi dinar (IQD) and social conditions.
Three Economic Cards Trump Could Play
1. Control Over Iraqi Oil Revenues
Since 2003, the US manages Iraq’s oil revenues via the Federal Reserve.
Oil funds constitute ~90% of Iraq’s state revenue.
A Maliki premiership could prompt the US to restrict access to oil revenue , directly pressuring Baghdad’s finances.
2. Restrict Dollar Transfers
US sanctions on banks for money laundering and terrorism financing have limited Iraq’s dollar access over the past three years.
Such restrictions fuel inflation, particularly because Iraq imports ~90% of its market needs in foreign currency, including from neighboring Arab states.
3. Indirect Dinar Collapse & Social Strain
Limiting dollars could devalue the IQD, worsening social conditions.
Inflation would spike as essential imports become scarce or more expensive.
Coupled with restricted foreign investment and disrupted banking operations, this could create a domino effect across Iraq’s economy.
Other Leverage Points
Military aid & equipment: >70% of Iraq’s military assets are US-supplied.
US Treasury bond investments: Iraq holds ~$32B, which could face restrictions.
Intermediary banks: Citibank, JPMorgan, and others facilitate Iraqi trade; disruptions here could freeze international transfers.
Analyst Insight: Nabil Al-Azzawi warns that the Coordination Framework must read Trump’s economic signals carefully given Iraq’s fragile political consensus and limited options.
Historical Context: Why Washington Fears Maliki
Maliki’s first premiership shifted economic cooperation away from the US, favoring Iran, Russia, and China in the energy sector.
Weak banking oversight caused dollar leakage, conflicting with US financial priorities.
Dependence on Iranian gas and electricity reduced US leverage, prompting caution today.
Economist Abdul Rahman Al-Sheikhly notes that Maliki’s return could complicate US efforts to sever Baghdad-Tehran ties, potentially destabilizing US influence in Iraq.
Potential Impact on the Oil Market
Iraq is the second-largest OPEC producer, following Saudi Arabia.
Any disruption in oil exports due to Maliki’s rise could tighten the market, affecting Brent crude prices.
While Trump’s threats haven’t yet impacted the oil market, further escalation could absorb existing surplus and create price volatility.
Featured Snippet
How could Trump pressure Iraq if Maliki becomes prime minister?
Trump has three primary economic levers: controlling Iraq’s oil revenues, restricting dollar transfers, and indirectly causing the Iraqi dinar to weaken. These actions could create inflation, disrupt social stability, and limit Iraq’s financial independence.
Q&A: People Also Ask
Q: Will Maliki’s premiership collapse the Iraqi dinar?
A: Potentially, yes. Dollar restrictions and inflationary pressures could devalue the IQD, though the extent depends on US policy responses.
Q: Why does Trump oppose Maliki?
A: Maliki has strong ties to Iran and a history of diverting Iraq’s economic partnerships away from US oversight, threatening Washington’s strategic influence.
Q: Can Iraq operate without US financial support?
A: Not fully. Iraq relies on US-controlled oil revenues, intermediary banks, and military support for economic and security stability.
Q: Could the oil market be affected by Maliki’s return?
A: Yes. Iraq is a top OPEC producer, and any disruption could absorb market surplus, raising global oil prices.
Conclusion: The Dinar, Maliki, and the Bigger Picture
Maliki’s return could trigger economic sanctions, inflation, and social strain.
Trump’s three cards—oil, dollars, dinar pressure—highlight US leverage over Iraq.
Political resolution, Central Bank readiness, and US cooperation are essential before the dinar reinstatement (RV) can proceed safely.
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