A pressure campaign by Washington to curb Tehran's influence over Baghdad seems to be yielding results, but any moves to disarm Iran-allied militias could stoke serious violence
On 10 July, after the dust had settled on the 12-Day War between Israel and the United States and Iran, Michael Knights, one of the best analysts of Iraq in Washington, wrote that this was “a moment of great opportunity for expanding US influence in Iraq... and reducing Iranian influence”. Knights noted the relative weakness—and therefore restraint—shown by the pro-Iranian militias in Iraq over the 12 days. It seems evident that Iran’s influence in Iraq has diminished. But is it ending?
American Treasury Department sanctions are reducing Iraq’s imports of Iranian energy, and with it, a form of Iranian leverage against Iraq, where electricity is not just an economic issue but a highly sensitive political issue. In recent weeks, there were protests about electricity shortages in Baghdad, Wasit, Diwaniyah, and the important city of Najaf—widely considered amongst the holiest cities of Shiite Islam.
Until recently, Iraq was importing around 1.5 GWh of electricity from Iran every day, to help meet a daily demand of around 45 GWh. Iranian electricity, therefore, equated to around 4% of Iraq’s supply, facilitated because both the first Trump administration and the Biden administration granted waivers to US sanctions on countries that pay Iran for traded goods. In March, however, Trump rejected a new waiver.
Energy diversification
So far, Trump has not sanctioned Iraq for importing Iranian natural gas, which is more important, since the natural gas imports (when flowing fully) generate about 30% of Iraq’s electricity. Trump has, however, demanded that Baghdad develop alternative sources of electricity and natural gas and move away from its current dependence on Iranian energy.
Two former Iraqi officials say that Iran tried to block Iraq from diversifying its supply sources. Former Iraqi Minister of Electricity Qasim al-Fadhawi noted in 2020 that Iran pressured the government of then Prime Minister Haider al-Abadi not to enter into an agreement with Saudi Arabia for the supply of electricity. This tallies with comments from Iraqi Shiite politician Baha al-Araji in 2018, who claimed that Tehran pressed Baghdad not to conclude agreements with Gulf states for electricity.
Although Iraqi militias hesitated to attack Israel and the US in the past two years, such reticence would dissipate quickly in an existential struggle
Despite behind-the-scenes Iranian pressure, the Iraqi government was growing unhappy with the unreliable and expensive supplies from its neighbour, so by 2022—and under pressure from the Americans—it sought new suppliers, signing an agreement with Saudi Arabia to build transmission lines to Yousifiya on the Iraqi side of the border to import 1 GWh (this project is ongoing), and another with the Gulf Cooperation Council to connect southern Iraq to the Gulf's grid.
Furthermore, Iraq signed an agreement with Jordan, which could soon be exporting 150-200 MWh to Iraq, according to the director of the Jordanian National Electric Power Company speaking to Petra News Agency in May. Iraq also imports 600 MWh from Türkiye, and is creating liquid natural gas (LNG) import facilities, though these will not be ready for some time. Earlier this year, Baghdad signed an agreement with the French company Total to build facilities to use gas now burned at oilwell sites for electricity production.
Wielding influence
Iraqi Prime Minister al-Sudani told Washington earlier this year that by 2028, Iraq would no longer need Iranian natural gas, but Iranian influence in Iraq goes deeper than gas. The Coordination Framework (CF) political bloc—which includes the big Shiite parties that work with Iran and the political face of key pro-Iranian militias known as the Popular Mobilisation Forces (PMF)—helped al-Sudani become Prime Minister in October 2022.
A December 2023 report from the Counter-Terrorism Centre at the American military academy detailed how the CF agreed to replace key officials with loyalists, including the director of internal security, the director of surveillance, and the director of counterintelligence at the National Intelligence Service (Iraq's CIA). Likewise, at the National Security Service (Iraq's FBI), the new director came from the Dawa Party and the deputy director from a big pro-Iranian militia, Asa'ib Ahl al-Haq.
The CF also took control of leadership appointments at airports, ports, the border force, customs, and key ministries. These officials control contracts, approve projects, and direct budgetary resources. In addition, the PMF—which includes many militias backed by Iran—gets direct funding from Baghdad, now a whopping $3.4bn per year (based on 2024 figures). By late 2023, this had allowed the PMF to expand its ranks to 238,000 personnel. In Baghdad, few dare ask how the PMF spends the money.
A PMF member holds a picture of Iran's late and current supreme leaders Ayatollah Ruhollah Khomeini (R) and Ali Khamenei to mark annual Quds (Jerusalem) Day commemorations in Baghdad on April 5, 2024.
Follow the money
All this causes headaches in Washington, but given that Iraq's economy relies on oil paid for in dollars, the US has leverage. Earlier this year, for instance, the US sanctioned a wealthy British-Iraqi businessman involved in the smuggling of Iranian oil, 12 tankers used in the smuggling operations, and a ship terminal at Khor Zubayr. This hurts Baghdad's reputation, just as it is seeking to attract more investment in the energy sector.
In June, salary payments to PMF members were delayed. Some Iraqi politicians said this came from US pressure on Rafidain Bank not to accept the bank cards of PMF members. The US Embassy said only that Iraqi banks must abide by international rules and standards, such as not providing funding to terrorist groups (in the end, PMF members got their salaries).
US and Israeli missiles alone cannot break the hold of the PMF and Iranian-backed Shiite parties on the Iraqi state. Senior officials who are killed are simply replaced. Iraqis alone can break the spell. And the CF-PMF bloc has weaknesses. They are not well-liked, for a start. In 2019, central and southern Iraq erupted in the Tishreen protest movement against Shiite Islamist parties and militias, with buildings burned in many cities, and the Iranian consulate in Basra was also attacked.
The threat was so serious that the militias responded both directly and through their control of internal security units, killing hundreds and wounding thousands, according to Amnesty International. The government, led by Shiite Prime Minister Adil Abdul-Mahdi, held only a handful of security force members accountable. He resigned a year later, in November 2019, amid ongoing protests against state corruption, repression, and the mismanagement of state resources.
Enter the clerics
Owing to these factors, Iraqis have increasingly lost faith in their leaders. Voter turnout in elections has dropped from 62% in 2010 to 43% in 2021. The political system—dominated by Iran for a decade—is seen as a rigged game, so it has lost the interest of the electorate, most notably the young, who feel disenfranchised. In response, senior Shiite religious leader Ayatollah al-Sistani, based in Najaf, regularly criticises government corruption, without naming individuals or parties. He also urged the government to control all weapons inside Iraq's borders. By implication, this suggests that the PMF should not operate independently.
Cleric Muqtada al-Sadr, who comes from an illustrious religious family in Najaf, is more directly involved in politics than al-Sistani, and he too has sharply criticised the militias, of which there is another loyal to him. Al-Sadr also criticised Iran's interference in Iraqi politics after Shiite parties stopped Sadr's bloc from forming a government in 2022. Al-Sadr and his parliamentarians walked out as a result. He is a fierce critic of the CF, his spokesman recently describing a "foreign scent" in Iraqi politics.
Al-Sadr wants deep reforms in the Iraqi state, the disarmament and dissolution of the pro-Iranian militias, and their integration into a strengthened Iraqi army, but says corruption makes these reforms impossible, so he is boycotting the November election. That election is worrying the Shiite parties and militia leaders that control the parliament, because on 13 July, al-Sadr said he would support an alternative political bloc that would implement his demands for reform, including the militias' dissolution.
Iran's Supreme Leader Ayatollah Ali Khamenei (L) speaking with Iraqi Shiite cleric Muqtada al-Sadr during a ceremony commemorating Ashura in Tehran on September 10, 2019.
Jostling for power
SotalIraq News reported on 15 July said that the CF was worried that al-Sadr might back Prime Minister al-Sudani, who promises to disarm the militias (although al-Sudani has made the same pledge before, and may plan to exclude the PMF). Al-Sudani is trying to become less reliant on CF parties like Dawa and the militias behind Fateh in 2026.
It is difficult to imagine a coalition from across Iraq that excludes the Shiite parties assembling after the November elections, winning a majority in the Council of Representatives, forming the next government, then removing senior state officials loyal to Iran's allies and disarming the Tehran-leaning militias. Iran's allies in Iraq would fight such a scenario both legally and (if necessary) physically, resulting in violence.
In 2022, they manoeuvred to block al-Sadr successfully. True, the militias showed hesitation towards Israel and the United States both this year and last, but such reticence would dissipate quickly in an existential struggle within Iraq itself. In terms of internal power struggles, they are not averse. Many suspect that the launch of drones by the PM targeting Erbil Airport and the oil facilities in Iraqi Kurdistan is a warning to the Kurds not to put pressure on Baghdad over oil.
This is a harbinger of the future. Even if the outline of an alternative ruling coalition starts to appear after the November elections, the short-term result would be ferocious political battles and violence. In short, their silence over the 12 days of war between Israeli-US forces and Iran in June does not mean that their days are numbered—far from it.
