US Suspends Dollar Shipments to Iraq Amid Militia Tensions

The United States has suspended shipments of U.S. dollars to Iraq and paused portions of its security cooperation with the Iraqi military, officials said, in an effort to compel Baghdad to rein in Iran-backed militias amid escalating regional tensions. The latest action involved blocking a cargo plane carrying nearly 500 million dollars in banknotes, derived from Iraqi oil sales held at the Federal Reserve Bank of New York, according to U.S. and Iraqi officials.

This marks the second such delay of scheduled dollar transfers to Iraq's central bank since the outbreak of the conflict between the United States, Israel, and Iran in late February. The funds, which support Iraq's largely cash-based economy for essentials like salaries, imports, and foreign exchange needs, are typically flown into Baghdad on a monthly basis. Iraqi officials noted that electronic dollar transfers for trade remain unaffected, while the central bank stated it has sufficient reserves to meet current demands from financial institutions.

The measures follow a series of attacks by Iran-aligned militias on U.S. facilities in Iraq, including drone and rocket strikes on the U.S. embassy in Baghdad's Green Zone,...