US Holds Sway Over Iraq's Oil Revenues Amid Troop Withdrawal

The US has maintained control over Iraq's oil revenues since its invasion in 2003, giving Washington significant leverage over Baghdad's economic and political stability.

The arrangement involves managing Iraq's oil income through the Federal Reserve Bank of New York, which holds the Development Fund for Iraq (DFI) account. This fund was initially set up by the Coalition Provisional Authority to collect oil revenues for reconstruction efforts and protect them from lawsuits related to Saddam Hussein's rule.

The DFI eventually became an account of the Central Bank of Iraq at the New York Federal Reserve, where it remains today. Oil makes up around 90% of Iraq's state budget, making this control crucial in determining the country's economic direction.

When Iraq asked US troops to leave in 2020, Washington reportedly threatened to cut off access to the New York Federal Reserve funds, with Baghdad ultimately backing down. This highlights the enduring influence of the US on Iraq's economic landscape, despite the country seeking greater sovereignty and independence.