US Maintains Control Over Iraq's Oil Revenues Despite Troop Withdrawal

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

The arrangement, which involves managing Iraq's oil income through the Federal Reserve Bank of New York, was set up by the Coalition Provisional Authority (CPA) led by the US. The Development Fund for Iraq (DFI), held at the New York Fed, collects the oil revenues for use in reconstruction and development efforts.

This control has implications for regional dynamics involving Iran, which has deep influence in Iraq. In 2020, when the Iraqi government asked US troops to leave, Washington reportedly threatened to cut Iraq's access to the New York Federal Reserve funds, with Baghdad ultimately backing down.