US Holds Sway Over Iraq's Oil Revenues Through NY Fed

The United States has maintained control over Iraq's oil revenues since its invasion in 2003. The arrangement allows Washington to wield significant influence over Baghdad's economic and political stability.

The system, which is managed by the Federal Reserve Bank of New York, was set up through the Development Fund for Iraq (DFI). This fund collects Iraq's oil revenues and protects 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. The arrangement has been renewed by every US president since George W. Bush, giving Washington a lasting grip on Iraq's finances.

Iraq's oil revenues make up about 90% of the state budget, providing the US with substantial leverage over Baghdad's affairs. In 2020, when Iraq asked US troops to leave, Washington reportedly threatened to cut off access to New York Federal Reserve funds, leading Baghdad to back down.