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US halts shipment of Iraq’s oil dollars in bid to curb Iran-linked groups

US halts shipment of Iraq’s oil dollars in bid to curb Iran-linked groups

Summary

The United States has stopped sending US dollars to Iraq from its oil revenue accounts and paused some military cooperation to pressure Iraq into limiting Iran-linked armed groups. This move aims to make Iraq reduce its ties with Iran during an ongoing conflict involving US and Iran-aligned forces in the region.

Key Facts

  • The US halted a shipment of nearly $500 million in US banknotes to Iraq’s central bank.
  • The money comes from Iraqi oil revenues held at the Federal Reserve Bank of New York.
  • This is the second time since February that the US delayed sending dollars to Iraq.
  • The US wants Iraq to reduce its support for armed groups connected to Iran.
  • Iran-aligned groups have attacked US military sites in Iraq and nearby countries.
  • The US has conducted airstrikes against Iran-linked armed factions within Iraq.
  • Iraq’s central bank says it still has enough US dollars in its reserves.
  • The US controlled Iraq’s oil revenue management after the 2003 invasion, giving it influence over Iraq’s economy.
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