Do you think that once Saddam was executed and the oil starting flowing again that the resource was turned over to the Iraqi people…..if so think again….

Now that the Iraqi government elections did not turn out the way the US wanted their only source of income is being threatened….

Iraq had a parliamentary election in late 2025, with the results ratified in mid-December. This, as usual, led to a scramble to try to form a majority coalition out of a large number of political parties that gained meaningful seats in a situation where the plurality was only 11.74%, far short of the ability to form a government without a slew of partners.

This is always a challenge, and involves a lot of internal compromise over cabinets and coalition structure. The US, however, is making this dramatically more challenging by threatening to withhold materially all of Iraq’s oil revenue from the Iraqi government if the coalition isn’t to their satisfaction.

The US is able to do this, because in post-occupation Iraq, their oil revenue is held in US dollars at the Federal Reserve Bank of New York, right where the US can easily get at it or restrict its transfer to the Iraqis whenever the mood suits them.

Shi’ites have a majority of the seats in Iraq’s parliament in practice. That’s no surprise as they are the majority of the population. Carving out a coalition of Shi’ites is easier said than done, however, because many of the parties are at odds with one another. Adding to that, the US has decided that Shi’ite parties that are still aligned with armed factions are “Iran-backed” and therefore “incompatible with building a strong partnership between the United States and Iraq.”

In practice this means that the threat is if the government includes any of the Shi’ite blocs which the US considers “Iran-backed” then Iraq will immediately lose all of its oil revenue for displeasing the US.

It’s a bigger problem then it seems on the surface, because the major Shi’ite blocs almost all have some ties with militias in some form or another. The expectation had been that the State of Law Party might parlay their 6% vote and fourth place finish into a return to power for former premier Nouri al-Maliki. Controversial given Maliki’s past, it is also seemingly impossible to argue that State of Law isn’t aligned with armed factions.

A lot of big parties have some ideological and practical ties to the Popular Mobilization Units (PMU), which are Iran-backed and while nominally integrated into Iraq’s own military, it’s almost impossible for any meaningful Shi’ite faction to not have any ties to them.

The PMU were historically scores of smaller militias, generally Shi’ite, generally Iran-aligned, and they merged over a decade ago to counter the rise of ISIS, which seemed convenient at the time, but which the US now seems to see as politically unpalatable.

This is not the first time the US has threatened to use their de facto control over Iraq’s oil revenue to coerce them. In 2020 after the assassination of Qassem Suleimani, Iraq threatened to expel US forces from Iraq in protest, and President Trump at the time threatened to seize their oil revenue in retaliation if they did so.

US Threatens To Cut Iraq Off From Oil Revenue Over Government Composition

I post this to posit a question….is this type of blackmail what the Venezuelan people have to look forward to in the future…..if their elections do not turn out the way we want we steal their oil from them?

At least Iraqi oil revenue is held in the Federal Reserve and not like Venezuelan oil which is in an offshore account where Donny can get his grubby hands on easily.

And now Iran is being threatened….and they have a huge reserve of oil….will they be the next in a long line for thievery?

I Read, I Write, You Know

“lego ergo scribo”