Middle East

How oil-rich Iraq ran out of dollars?

Published

29.01.2023 17:48

Three years ago, Iraq was on the brink of expelling US troops, but now, Prime Minister al-Sudani asserts that his nation needs US and NATO forces. Although he gives ISIS as the reason, the dollar crisis in the country seems to be a more plausible explanation. The political actors backing al-Sudani blame the United States for the crisis but having to handle this crisis shortly, al-Sudani sees the exit in reconciliation with Washington.

The political turmoil in Iraq after the elections in October 2021 resulted in al-Sudani taking the seat of Prime Minister as a candidate of the so-called Iran-backed Shiite alliance in October 2022. in his first US interview since taking office, al-Sudani said, “we need the foreign forces to eliminate ISIS.” “Iraq would like similar relations with Washington to what Saudi Arabia and other Persian Gulf oil-and-gas producers enjoy,” al-Sudani told WSJ, “we strive to “see Iraq have a good relationship with Iran and the US.” Stating, “President Biden is different from other presidents in that he knows the situation in Iraq completely,” al-Sudani thinks it might be the foundation to build an excellent relationship between Baghdad and Washington. al-Sudani’s views regarding keeping the US and NATO forces in Iraq are deemed significant since he has been publicly silent about this issue until now. After the killing of Iranian commander Qassem Soleimani in a US drone strike on Baghdad, the Iraqi parliament voted a resolution to withdraw American troops from the country. Currently, 2,000 American troops in Iraq under the umbrella of NATO are training the Iraqi armed forces.

According to Foreign Policy, al-Sudani’s public support for the presence of US troops originates from the threat of ISIS. al-Sudani’s words, however, are not an unexpected turn; instead, they reflect a steady movement toward the United States in recent years. The article’s title is also noteworthy: “The New Iraqi Leader tilts the scales toward the USA.” Former US officials told Foreign Policy that even amid the tension escalating after the assassination of Soleimani, Iraqi officials had expressed support for the US military mission behind closed doors to ensure to defeat of ISIS and counter Iranian influence. “US presence that was hanging by a thread in pre-pandemic Iraq, at the tenuous invite of the Baghdad government, now appears to be there to stay—indefinitely,” interprets the journal the situation that became concrete upon al-Sudani’s statement. Although al-Sudani created uproar in Iraq, the more significant problem is that Centcom has no planning or vision about the future of the US-Iraq relationship.

“The presence of foreign military forces in this country is a very dangerous issue,” remarked Nouri al-Maliki, the leader of the Shiite alliance that brought al-Sudani to the office and kept him in power. It is remarkable that Maliki’s statement followed al-Sudani’s controversial comment.

Then, why did al-Sudani express his public support for the presence of the US troops in the country “independently” of the coalition behind his power and despite growing anti-American sentiments in Iraqi society over the last several years?

The reason for the crisis: US sanctions

Sudani employs the existence of ISIS to justify his statement, but it seems that the underlying issue is the currency crisis that shook the Iraqi markets. Unlike other oil-rich countries, the second largest oil producer of OPEC after Saudi Arabia, Iraq stands out for its economic problems and the massive social protests these sparked. The current crisis, however, is not the same as the usual mechanism of bribery and corruption that plagues Iraq. It has everything to do with US sanctions. The restrictions put into practice by the US to prevent the illegal allocation of dollars for the interests of other US-sanctioned countries, especially Iran, have triggered a severe dollar crisis in the country.

The USA has implemented a “regulation” to the system that allows the daily foreign exchange auctions of the Iraqi Central Bank, which has been in effect for 20 years since the invasion and permitted banks to sell dollars without any restrictions. In November 2022, the US Federal Reserve (FED) started enforcing strict screening on the operations of Iraqi commercial banks, such as requiring all clients to disclose their identities before a transfer of funds could be made. In fact, these measures were implemented after almost two-year planning by the Central Bank of Iraq, the US Department of the Treasury, and the FED. However, in spite of all the planning, since the strict regulations have been in effect, more than 80% of daily dollar transactions have been blocked. As a result of the slowdown in dollar transactions, the markets have rushed into the dinar, ultimately creating a double-sided “currency crisis.”

Protests in rise

Due to the crisis, the value of the Iraqi dinar has weakened vis-à-vis the dollar, leading to a sharp rise in food prices. Over the currency drop, on January 23, al-Sudani dismissed Central Bank Governor Mustafa Ghaleb Mukheef on his request, and Muhsen al-Allaq replaced him. After a slight decrease in the exchange rate following the replacement of the office at the Central Bank, it has begun to increase again quickly. The official rate for Iraqi citizens set by the Central Bank stands at 1,470 dinars to the dollar. Established by the Central Bank of Iraq is 1470 Iraqi dinars per dollar, while on the black market and free market, it ranges from 1590 to 1620 dinars.

Iraqis slowly started to protest against the devaluation of the dinar. The protesters gathering outside the Central Bank called on the government to halt the depreciation of the dinar. Those demonstrating in Iraq called on al-Sudani’s government to do everything they could to bring down inflation. Mainly, they demanded that staples like eggs be made more affordable. Protesters from south Iraq also participated in the demonstration in Baghdad.

The ruling coalition blames the US

Hadi al-Amiri, the leader of the Fatah Coalition and a partner of the Iraqi government, accused the US of using the dollar as a weapon to starve the people in Iraq. “Since the reserves of this country’s central bank are at the Federal Reserve’s disposal, Iraq lacks economic independence. Everyone now knows how the Americans use the dollar as a weapon to starve people. The Americans are currently putting the most pressure on Iraq to prevent its relations with Europe and other countries of the world,” said al-Amiri.

Maliki, the head of the same coalition, claims that the United States uses the dollar as a global weapon: “They try to destabilize it by using dollar paper.” Maliki, however, sees the United States as the key to solving the issue: “There is no solution to the dollar crisis except by controlling the dollar and understanding with the American side.”

Here, the reason behind al-Sudani’s controversial statement that US soldiers are required in Iraq is nothing but Maliki’s proposed solution. al-Sudani is trying to find a way to ease the effects of the dollar crisis. In this regard, he plans to send the Foreign Minister to Washington at the start of February, followed by his own visit. The Iraqi premier may try to negotiate looser US screening on the movement of dollars or at least a postponement of such controls. As the Prime Minister of a coalition accused of being “pro-Iran” and even a “puppet of Iran,” al-Sudani may have hoped that sending sound signals to the United States would facilitate reconciliation. Against this backdrop, Foreign Affairs’s inference that the “The New Iraqi Leader tilts the scales toward the USA” seems an unrealistic expectation.

The dollar is indeed a powerful winning tool in the hands of the USA. The United States may offer the Iraqi government a short-term solution to the pressing crisis. The country is still nothing but one of the major oil producers, although the post-invasion system in Iraq is plagued by bribery, corruption, and smuggling. The greater challenge is that Iraq lacks the political will to combat the issue and blow the cobwebs away.

Related Topics:al-Sudani dollar İran IRAQ Maliki petrol protests US sanctions

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Qatar and UAE LNG tankers go dark in Strait of Hormuz to evade security risks

Published

14 hours ago

03/06/2026

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Qatar and United Arab Emirates liquefied natural gas (LNG) tankers are turning off their transponders in the Strait of Hormuz, shifting their logistical strategies in response to ongoing military conflict in the Middle East and the closure of the strategic waterway.

According to a Bloomberg report citing industry sources and vessel-tracking data, as time and patience run thin for both nations, tankers have begun operating under radio silence to conceal their movements and secure their LNG shipments.

The report noted that neither Qatar nor Abu Dhabi, the federal emirate of the UAE, is subject to international sanctions. Despite this, state-owned QatarEnergy and Abu Dhabi National Oil Co. (ADNOC) are employing these “going dark” tactics to minimize security risks for their vessels and crews transiting the Strait of Hormuz.

Vessel-tracking data revealed that in May, at least four Qatari LNG vessels and four tankers linked to Abu Dhabi-based ADNOC transited the Strait of Hormuz without transmitting tracking signals. Sources speaking to Bloomberg stated that Qatari authorities requested captains of state-owned and chartered tankers to turn off their Automatic Identification System (AIS) transponders when navigating around the Ras Laffan port—the world’s largest LNG export terminal—as well as when transiting or exiting the Persian Gulf.

The implemented security measures extend beyond turning off transponders. Sources reported that vessels have been instructed to transit the gulf in pairs to enhance security, and tanker captains who refused to comply with the “shadow” navigation protocols have been replaced.

Industry sources speaking to Bloomberg warned that the increase in covert transits undermines the fundamental rules of international maritime trade and transforms these shipping routes into high-risk areas.

They emphasized that until recently, every cargo in the LNG sector could be tracked in real time, but these newly adopted tactics have eliminated that transparency.

Saul Kavonic, a senior energy analyst at energy consultancy MST Marquee, commented on the situation, saying: “It is entirely natural for Persian Gulf LNG producers to try to avoid Iranian attacks and consequently adopt shadow fleet methods. This could persist as long as Iran continues to control and threaten transits through the Strait of Hormuz. This practice may continue for a long time even after a peace agreement is signed.”

Following the start of US and Israeli attacks on Iran, the Tehran government closed the Strait of Hormuz, a choke point for approximately 20% of global oil shipments and 30% of global liquefied natural gas.

After negotiations in Islamabad failed, US President Donald Trump announced on April 13 that he would impose a blockade on Iranian ports. In late May, he announced that the blockade was lifted as part of the planned peace treaty process with Tehran.

Middle East

Israeli defense exports hit record $19.2 billion fueled by regional conflicts

Published

14 hours ago

03/06/2026

Harici.com.tr

The Israeli Ministry of Defense has announced that international demand for military systems manufactured in the country and deployed in regional conflicts has reached unprecedented levels.

In an official statement, the ministry declared that exports of military equipment and weaponry have hit an all-time high for the fifth consecutive year.

According to the disclosed data, export volume reached $19.2 billion in 2025, representing an approximate 30% increase compared to the previous year. The figures demonstrate that the country’s defense exports have doubled over the past five years and quadrupled over the past decade.

Data shared by the ministry indicates that missile, rocket, and air defense systems secured the largest share of military sales contracts signed throughout 2025.

Sales in this sector accounted for 29% of the total trade volume. The ministry noted that the vast majority of these agreements fell into the category of “mega-contracts”—each valued at a minimum of $100 million—and that these large-scale deals constituted 53% of the total export volume.

The Ministry of Defense directly attributed this export growth to ongoing regional military operations.

The statement argued that global demand was driven by results achieved on the ground and the “combat-proven” performance of Israeli-made systems across all fronts, including the “Rising Lion” operation launched against Iran in June 2025.

Since October 7, 2023, Israel has conducted simultaneous military operations across multiple fronts in Gaza, Yemen, Lebanon, Syria, and Iran.

The military equipment and ammunition described as “combat-tested” in the ministry’s report continue to be deployed in active conflict zones, most notably in Lebanon.

Among the defense firms highlighted during this period is the Israel-based company Xtend, which has drawn attention for its unmanned aerial vehicles (UAVs).

Systems developed by the company have reportedly been utilized in operations in Gaza and for targeted assassinations. International reports revealed that an Xtend UAV was used to locate Hamas leader Yahya Sinwar, who was killed in October 2024.

Earlier in the year, Eric Trump, son of US President Donald Trump, announced that he would make significant investments in Xtend’s technology and support the company’s merger with the Florida-based JFB Construction Holdings.

Meanwhile, airstrikes and bombings conducted by the Israeli military continue to drive up civilian casualties in Gaza and Lebanon. In Lebanon alone, attacks over the past few months have claimed more than 3,400 lives. Thousands of deaths have also been reported in US-backed military operations carried out in Iran.

Studies published in the medical journal The Lancet project that the total death toll in Gaza, when including both direct and indirect fatalities, could reach hundreds of thousands.

During this period, the United Arab Emirates (UAE), which has supported Israel’s operations, emerged as one of the largest buyers of Israeli-origin weapons.

The Gulf nation is reported to have procured billions of dollars in military equipment from Israel over the past five years. According to US sources, the Abu Dhabi and Tel Aviv administrations have established a joint fund to develop and procure new weapons systems.

On the other hand, as Tel Aviv continues to market its air defense systems globally, military tensions along the Lebanese border persist.

Hizbullah kamikaze drones have reportedly targeted Iron Dome batteries positioned at Israeli locations near the Lebanese border. The Israeli military has reportedly faced difficulties intercepting these attacks, with dozens of Israeli soldiers killed in Hizbullah strikes launched since March 2.

Middle East

Report challenges official assessments of damage from Iranian attacks on US military assets

Published

2 days ago

02/06/2026

Harici.com.tr

BBC Verify, the verification unit of the BBC, published a detailed investigation on June 1 based on satellite imagery and video analysis that found Iranian retaliatory strikes had successfully hit and damaged at least 20 US military facilities across the Middle East since the start of the war launched against Iran by the United States and Israel.

The findings suggest that the scale and accuracy of Iran’s retaliatory attacks were significantly greater than previously acknowledged by US officials. Some independent analysts estimate that the number of affected bases may be as high as 28.

The military facilities targeted were reportedly spread across eight Gulf countries: Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, Iraq, Jordan, Bahrain and Oman.

Material losses in the region are said to include three THAAD missile defense batteries, each valued at approximately $1 billion and regarded as a cornerstone of the regional defense network.

Expert assessments also identified at least 42 aircraft that were destroyed or severely damaged, including F-35 fighter jets, MQ-9 Reaper drones and an E-3 Sentry airborne early warning and surveillance aircraft valued at $700 million.

According to military analysts, Iran achieved these results by altering its tactics. Rather than relying on large-scale, high-volume barrages, Tehran reportedly shifted to using smaller, more precise salvos concentrated on high-value infrastructure targets.

The shift in strategy was said to have exploited what was described as a degree of complacency within the US military during the early stages of the conflict.

US military commanders reportedly failed to relocate aircraft and other military assets at strategic installations such as Prince Sultan Air Base in Saudi Arabia despite previous attacks on those facilities, a factor that is said to have increased losses. Commenting on the strikes, Iranian Supreme Leader Mojtaba Khamenei declared that the Middle East was no longer a “safe place” for US bases.

The White House had previously claimed that Iran’s military capabilities had been almost entirely eliminated.

However, the Pentagon’s latest estimates place the cost of the war at $29 billion.

A substantial portion of that expenditure is reportedly being directed toward repairing heavily damaged military equipment and replenishing significantly depleted munitions stockpiles. Former military officials have warned that damaged air defense systems in the region “cannot be replaced quickly or easily.”

The heavy consumption of interceptor missiles during the conflict has also left other US facilities across the Gulf increasingly vulnerable to future Iranian precision-guided missile attacks, according to the assessments cited.

The Washington administration is also reported to have sought restrictions on satellite imagery providers in an effort to conceal the extent of the damage and limit criticism.

However, the “smoking craters” and flattened aircraft hangars featured in the BBC report appear to contradict official US assertions, illustrating what the report described as the true scale of the destruction on the ground.

Iran also announced that it struck a US air base in Kuwait with missiles and drones on Sunday night in retaliation for attacks by US forces on Iranian military targets over the weekend, which Tehran said constituted a violation of the ceasefire.