US Resumes Dollar Shipments to Iraq After Months-Long Suspension

The United States has resumed sending dollar shipments to Iraq following a several-month suspension, Iraqi officials confirmed on Thursday. The announcement came from the spokesperson of Iraq's new Prime Minister, Ali Al-Zaydi, who took office in late April. The suspension was reportedly intended to pressure the new Iraqi government to distance itself from Iran and Iranian-backed groups. Alongside halting dollar transfers, the US also paused cooperation and funding for local Iraqi security forces during this period.

This development coincides with reports of a preliminary agreement by the US government to release $3 billion in frozen Iranian assets. The US had previously implemented stricter banking regulations with Iraq to increase transparency on dollar transfers, aiming to curb illegal flows to criminal entities, money launderers, and armed groups, including those supported by Iran.

Since assuming office, Prime Minister Al-Zaydi has taken swift measures to curb the influence of Iranian-backed militias in Iraq, including ordering all militias to come under direct state control. Despite these efforts, a Reuters report last month revealed that Iran's Revolutionary Guards have established secret cells in Iraq to carry out attacks against Gulf states hosting US forces, circumventing known militia networks to avoid retaliation.

The resumption of dollar shipments signals a potential easing of US pressure on Iraq amid ongoing regional tensions involving Iran and its proxies. The Iraqi government and the US are expected to continue navigating these complex security and financial challenges in the coming months.