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How oil-rich Iraq ran out of dollars?

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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.

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US and Israel weigh Iran strikes after midterm vote, reports say

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22/10/2026

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The US and Israeli defence ministries have drawn up plans for a fresh assault on Iran, with the envisioned offensive under consideration to launch after the US Congressional midterm elections on 3 November.

Citing sources, The New York Times reported that the blueprint anticipates a brief but intense campaign.

As military units step up their drills, US Defence Secretary Pete Hegseth discussed prospective strike options with Israeli Prime Minister Benjamin Netanyahu.

The list of targets encompasses Iran’s nuclear sites, its energy infrastructure, and its arsenals of missiles and unmanned aerial vehicles.

Several officials who spoke to the newspaper argued that a new wave of attacks could deal a heavy blow to the Iranian economy, forcing the leadership in Tehran into concessions.

Conversely, other sources doubt whether a resumption of fighting would prove any more successful than the earlier campaign conducted between February and April.

That previous offensive drove energy prices higher and drained US stockpiles of interceptor missiles.

It remains unclear whether US President Donald Trump will authorise the operation.

Domestic political calculations in Israel could also influence the trajectory of the plans, given that the country faces general elections on 27 October.

While some experts speaking to the newspaper contended that Netanyahu could leverage the threat of war to form a national unity government, others pointed to the opposition’s distrust of the prime minister.

Washington fears regional spillover

The US administration also harbours concerns that the fighting could engulf the wider region. On Wednesday, the US State Department ordered non-essential government personnel and their family members to leave Saudi Arabia following attacks by the Iran-backed Houthis.

A US military build-up, comprising three aircraft carriers, fighter aircraft, and special forces units, is slated to be fully deployed to the region by early November.

The targets under review include the deep underground nuclear facility code-named “Pickaxe”. Trump suggested that the high-yield GBU-43/B bomb, known as the “mother of all bombs”, could be deployed against the site, though experts doubt whether the ordnance can destroy a complex buried so deeply.

For its part, Tehran is preparing for a potential escalation, threatening to broaden its target list. Retaliatory options under consideration by Iran reportedly include data centres and subsea internet cables, in addition to shipping and energy facilities.

Mehdi Mohammadi, an adviser to an Iranian negotiator, dismissed US hopes of wrapping up a new campaign within 72 hours as a “fantasy”. Mohammadi warned that Tehran’s response would be more severe and unpredictable.

The Financial Times previously reported that an Israeli strike on Iran set for 10 October had been called off because the US president was unwilling to risk a broader conflict ahead of the Congressional midterms.

According to that report, the Israeli military had prepared a multi-day assault on nuclear sites, Iranian government targets, power plants, and civilian infrastructure on Netanyahu’s orders. The strikes had been designed to exceed the intensity of the campaign begun in February.

Washington seeks to secure an agreement from Tehran covering both the Strait of Hormuz and its nuclear programme.

“It will either be a deal or a strike,” one source told the Financial Times, adding that an operation could get under way in the coming weeks.

Another official who spoke to the paper suggested that Israeli preparations might serve as leverage to squeeze Iran in negotiations.

Axios also reported that the Pentagon had issued orders to prepare for renewed strikes, though the directive contained no specific date and Trump has yet to take a final decision.

The US and Israel launched their offensive against Iran on 28 February. Iran hit back by targeting US and Israeli assets across the region and curbing vessel transit through the Strait of Hormuz.

Although both sides signed a memorandum of understanding in June that provided for a ceasefire and talks to lift the blockade in the Strait of Hormuz, reciprocal attacks between the US and Iran have persisted.

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Netanyahu trails Eisenkot in Israeli polls despite Trump backing

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21/10/2026

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As general elections scheduled for 27 October approach in Israel, the opposition camp led by former Chief of Staff Gadi Eisenkot continues to lead Prime Minister Benjamin Netanyahu in public opinion polls.

Survey data published in the Israeli press on 19 and 20 October reveal that the governing coalition has failed to catch the opposition, despite explicit backing from US President Donald Trump.

However, the current distribution of votes documents that neither wing can reach a governing majority on its own.

Neither bloc reaches the 61 seats needed to form a government

According to a survey conducted by Channel 13, if an election were held today, Eisenkot’s bloc would win 51 seats, while the Netanyahu coalition would take 50.

A Channel 12 poll indicates that the gap has widened slightly, projecting 55 seats for Eisenkot’s alliance and 51 for the governing bloc. A minimum of 61 seats is required to form a government in the Knesset, Israel’s 120-seat parliament.

A key factor deadlocking the political arithmetic is the refusal by both sides to form a coalition with parties representing Palestinian citizens of Israel. This stance stands as the most tangible obstacle to securing a parliamentary majority after the election.

Channel 12 data shows that overall voter turnout is expected to remain at 72%. The inclination to head to the ballot box climbs to 81% among opposition voters, compared with 74% measured among Netanyahu supporters.

The same poll notes that Eisenkot has widened his lead over Netanyahu by two further points in prime ministerial preferences.

Yashar party climbs after Gantz bows out

A survey published on the Walla news site shows that the balance shifted after Benny Gantz decided to withdraw his Blue and White party from the race. Following that move, Eisenkot’s Yashar party increased its projected tally to 23 seats, while Netanyahu’s Likud dropped by one seat to 19.

Eisenkot’s party and the “Zionist Opposition” bloc it anchors have remained atop the polls for several months.

In an earlier message of support, Trump praised Netanyahu as “a great fighting prime minister and an even greater partner for peace.” Public opinion polls document that this diplomatic and political backing has not proved sufficient to tip the preferences of the Israeli electorate in favour of the incumbent government.

Support for Ben Gvir rises among young voters

Although Netanyahu’s alliance trails in overall strength, far-right figures within the coalition appear to be expanding their grassroots base. Gauged interest in the Jewish Power party of Israeli National Security Minister Itamar Ben Gvir is climbing, particularly among younger voters.

Speaking to a study conducted by Agam Labs, affiliated with the Hebrew University of Jerusalem, an 18-year-old student described his shifting preference: “I used to think he was a bit crazy, but then I actually looked at what he was saying, and it all made sense.”

Another Israeli citizen stated that Ben Gvir’s push to arm West Bank settlers gave them “room to breathe.”

Ben Gvir is known for leading settler incursions into the Al-Aqsa compound and distributing military-grade rifles to tens of thousands of settlers since 7 October 2023.

Criticized for escalating violence against Palestinians, Ben Gvir has called for starving Gaza, maintaining military operations in Lebanon, and bombing Beirut. The far-right minister’s militaristic stances also find a political constituency across several opposition parties in Israel.

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Netanyahu unveils security doctrine and regional alliance map

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20/10/2026

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Israeli Prime Minister Benjamin Netanyahu has shared an updated security doctrine with the public ahead of general elections scheduled for 27 October.

Announced by the Prime Minister’s Office on 18 October and shaped with contributions from the National Security Council, the work includes a detailed map classifying Israel’s regional allies, adversaries, and spheres of influence.

The new doctrine aims to eliminate elements defined as threats directly through pre-emptive military interventions rather than containing them, to expand buffer zones, and to establish new regional partnerships.

Al Jazeera points out that this approach has effectively been put into practice during Israel’s recent military operations and strikes against neighbouring countries.

Regional blocs and allies classified on the map

The map presented by Netanyahu classifies not only sovereign states into blocs, but also armed groups, de facto administrations, and territories controlled by various forces.

The terms “alliance” and “friend” used on the map do not imply that formal and binding partnerships have been established with all these entities.

The “Hexagon Alliance” on the Israel-United Arab Emirates (UAE) axis and parties considered “friends” of this bloc are shown in blue and light blue shades.

This group includes Azerbaijan, Greece, southern Cyprus, the Druze in Syria’s As-Suwayda province, eastern Libya under Khalifa Haftar’s control, Ethiopia, Somaliland, Puntland, areas in Yemen held by the UAE-backed former Southern Transitional Council, and territories controlled by the Rapid Support Forces in Sudan.

The “Sunni Diamond Alliance”, formed by Türkiye, Egypt, Pakistan, and Saudi Arabia, alongside peripheral actors, is distinguished by green and light green shades.

This cluster marks Azerbaijan, Syria, Qatar, Kuwait, areas in Yemen controlled by the Saudi-backed Presidential Leadership Council, Eritrea, Sudan, the West Bank, Jordan, the Lebanese government, Northern Cyprus, and Somalia. In Libya, both the Tripoli-based western administration and the Haftar-dominated eastern administration are shown as linked to this bloc.

Iran and the Axis of Resistance are defined in red and pink colours. Hashd al-Shaabi in Iraq, eastern and southern parts of Lebanon where Hezbollah is active, Ansar Allah-controlled areas in Yemen, and Hamas-administered Gaza find a place within this axis. Russia is marked on the map in pink under “friend” status to this bloc.

Orange and yellow markings are also used around NATO members, alliance partners, and actors with friendly relations with Washington. The lines also illustrate the permeability between blocs.

For instance, Azerbaijan is presented with two-toned stripes as a friend of both the Israel-UAE axis and the Türkiye-led bloc, while India stands out as the only actor classified as a “friend” to all parties.

The map in question was reportedly prepared in May by Marc Saxer and Marcus Schneider for the Germany-based Friedrich Ebert Foundation, which has engaged with Israeli governments since 1978.

Pre-election rhetoric of the “indispensable leader”

Netanyahu is facing voters in a bid to retain power amid ongoing corruption proceedings and continued criticism over his management of the 7 October 2023 attacks and subsequent conflicts.

According to Al Jazeera’s analysis, releasing the security doctrine and map on the eve of elections rests on Netanyahu’s strategy of establishing himself as the only capable leader who can protect Israel.

Backed by electoral support from US President Donald Trump, Netanyahu pointed during his presentation to a potential change of administration in the White House.

Arguing that an administration distant or hostile to Israel could take office in Washington within two years, Netanyahu said his country must expand its network of alliances and become an attractive regional partner because of that possibility.

Mohanad Hage Ali, deputy director for research at the Malcolm H. Kerr Carnegie Middle East Center, noted that this presentation, built on rival blocs and security corridors, deepens existential anxieties within society.

According to Hage Ali, this approach reinforces voters’ perceived need for a tough leader, and Netanyahu is attempting to rally support from populations wary of uncertainty through this reassurance.

Fierce backlash from the Israeli opposition

The publication of the document provoked reactions in Israeli domestic politics.

Gadi Eisenkot, leader of the Yashar Party and former chief of general staff, criticised the work as consisting of “two empty pages filled with slogans that have nothing to do with an actual security doctrine”.

Emphasising that the Netanyahu government was responsible for the “gravest failure and disaster in Israel’s history” on 7 October, Eisenkot said subsequent escalating regional clashes had also left every front engulfed in flames.

Eisenkot argued that the document exposes a lingering strategic vacuum, while the prime minister is reviving fears to divert attention from misleading claims in his election pledges.

Yesh Atid leader and former prime minister Yair Lapid also described the text as superficial.

“Even by Netanyahu’s current standards, which are defined by exhaustion and detachment from reality, this document looks as if it was written using a free version of an AI chatbot,” Lapid said.

Lapid added that a text consisting merely of bulleted headings cannot be deemed a doctrine, and that the effort is nothing more than an attempt to cover up the disasters caused by the prime minister.

The buffer zone model

The buffer zone concept featured in the strategy document is based on Israel establishing direct military control over cross-border territories.

Al Jazeera notes that the current occupation conditions in Gaza and southern Lebanon are practical reflections of this policy.

Mohanad Hage Ali warned that a plan based on making military control permanent could bring fresh conflicts and the risk of ethnic cleansing.

Hage Ali also noted that portraying actors such as the Rapid Support Forces in Sudan and Haftar’s forces within the Israel-UAE axis could damage their legitimacy in the Arab world.

Arguing that this choice reflects Netanyahu’s domestic priorities, Hage Ali observed: “What Israelis think becomes more important than the reputation of your allies and the sustainability of these alliances.”

Netanyahu’s proposal for a “hexagon of alliances”, raised at the beginning of the year and covering India, Greece, southern Cyprus, and unspecified Arab, African, and Asian nations, has yet to be formalised.

While international analyses describe the initiative as a diplomatic branding exercise rather than a binding defence pact, observers recall that actors such as India prioritise commercial interests and non-alignment over rigid blocs.

Finally, Hage Ali stated that the presented map will provide propaganda material for the Tehran government and its allies, reinforcing arguments that Israel harbours regional expansion and domination ambitions.

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