Recent US actions have signaled Iraq’s return to the American radar.

During the Gaza Summit in Sharm al-Sheikh, US President Donald Trump made a passing remark directed at Iraqi Prime Minister Mohammad al-Sudani: “Iraq is a country full of oil, but it doesn’t know what to do with it. That’s your problem.”

The comment was soon followed by renewed diplomatic maneuvers aimed at Baghdad. Iraqi-born Mark Savaya was appointed US Special Envoy to Iraq, and Secretary of State Marco Rubio held a phone call with the Iraqi premier.

These moves are far from arbitrary, and their timing is deliberate. Oil remains a central concern within Washington’s broader strategy to reduce dependence on Russian energy supplies, especially as Europe braces for another potentially scorching winter.

Russia and the deep links to Iraqi oil

To better understand the situation, one must be conscious of the Russian involvement in the Iraqi oil sector. 

As of 2024, Russia’s investments in Iraq’s oil and gas sector reached $19 billion. In May 2025, the Iraqi ambassador in Baghdad, Elbrus Kutrashev, announced that investments had risen to $20 billion. 

In a statement to Shafaq News, Kutrashev said that three Russian companies are operating in Iraq’s oil sector while a fourth is preparing to enter the gas market. 

A report published in April 2024 by the Primakov Center for Foreign Policy Cooperation in Moscow noted a growing partnership between Russia and Iraq, particularly in the logistics and energy sectors. The report stated that Russian oil and gas giants, including Lukoil, Gazprom, and Rosneft, have invested more than $19 billion in Iraq, with most of the ventures concentrated in energy production and infrastructure.

The study also highlighted efforts by both countries to align Iraq’s Development Road initiative with Russia’s International North–South Transport Corridor (INSTC), a 7,200-kilometer multimodal network linking Asia and Europe through maritime, rail, and road routes.

Moscow is also present in the Kurdistan region, Rosneft reportedly has a 60% stake in Kurdistan Region’s oil export pipeline according to the Rudaw Research Center, and Russia has also openly mediated for the resumption of the Kurdish oil exports via the Iraq-Turkey pipeline and finalized negotiations between the KRG, the Iraqi government, and international oil companies that lasted for more than two years. 

Russian Foreign Minister Sergei Lavrov said that Russia is “very happy about it," adding the export deal means "only one thing, that the Kurds and Arabs in Iraq can deal with each other and find an agreement."

In turn, Dr. Dindar Zebari, the KRG’s Coordinator of International Advocacy, praised the contribution of Russian energy companies in Kurdistan, specifically naming Gazprom as a critical actor in the region’s oil infrastructure. “We are witnesses that Russian Gazprom has played a key role in recent years,” he said.

Washington strikes with sanctions and oil deals

Cue the American sanctions. 

On October 22nd, the US imposed fresh sanctions on Rosneft and Lukoil, as well as all entities in which they hold a direct or indirect stake of 50% or more, for operating in Russia’s energy sector, to amp up pressure on Russia. 

It’s worth noting that a ceasefire in Ukraine was promised during Trump’s campaign, when he argued that he could solve the issue swiftly, a statement he later backtracked from when faced with reality.

All US-based assets of the two Russian energy companies have been frozen, and US entities or individuals are now prohibited from engaging in any transactions with them.

Additionally, Washington has warned that foreign financial institutions maintaining ties with Rosneft or Lukoil could face secondary sanctions, thereby extending the restrictions’ reach beyond US borders.

As the chokehold tightens around these companies, major investors in the Iraqi oil sector, Baghdad could face operational and financial obstacles that might disrupt production timelines. 

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Meanwhile, just as US politics, American oil companies are making a return to Baghdad. Exxon Mobil re-entered the country in early October, after a two-year absence, signing a deal with the Iraqi government to help develop the giant Majnoon oilfield and expand Iraq’s oil exports.

In August, the US’ Chevron also signed a Principal Agreement with the Iraqi Oil Ministry to develop the Nasiriyah Project, including four exploration blocks, the Balad oil field, as well as other producing fields and exploration blocks.

Once again, the timing does not seem to be random, as such a reentry into the Iraqi oil sector could serve as an alternative if the continuous pressure of sanctions on Russian companies proved to be useful.

US companies, or others aligned with Washington’s allies, can, in theory, move into the market and provide expertise and operations without the direct obstacles imposed by the sanctions.

Targeting the PMF: Pressure under false banners

In parallel with the sanctions targeting Russian oil companies and the return of US soft-power diplomacy in Iraq, calls have grown to disarm a key component of the Iraqi military: the Popular Mobilization Forces (PMF).

For context, the PMF was established in 2014 in response to the rapid expansion of ISIS across Iraq and Syria, at a time when the holy cities of Najaf and Karbala faced imminent threat.

The PMF later proved crucial to Iraq’s security, playing a central role in liberating major cities from ISIS, notably Mosul, Tikrit, and Fallujah. Today, the PMF operates under the umbrella of the Iraqi Armed Forces, working in coordination with them on multiple fronts. The forces also contribute to border security, counter-infiltration efforts, and regular anti-terrorism operations across the country.

In essence, the PMF was founded to combat terrorism and continues to serve that mission to this day.

In the 2024 provincial elections, parties running under the Iran-aligned Coordination Framework, which include many PMF-affiliated groups, won 101 of 285 provincial council seats, making them a decisive political force in local institutions.

In recent years, however, sanctions targeting the PMF and its factions have steadily increased. The return of Donald Trump to office signaled a renewed and more aggressive approach, consistent with his administration’s broader “maximum pressure” campaign against Iran and its regional allies.

Despite the PMF’s established role in combating terrorism, the United States continues to employ “terrorism” as a blanket justification for sanctioning entities it deems adversarial. It also frequently invokes vague phrases such as “threatening Iraq’s sovereignty”, a charge that stands in stark contrast to Washington’s own long record of military and political overreach in the country.

The Iraqi response was not what the US had hoped for as Baghdad formally condemned these sanctions as “deeply regrettable” and “unilateral”, adding that such measures violate the spirit of the Iraq-US partnership, noting that they were imposed “without prior consultation”.

Sanctions against such groups have historically proven ineffective in weakening them directly; rather, they tend to provoke local frustration. In the case of the PMF, the group is deeply involved in development projects across the country. Targeting individuals affiliated with the PMF is primarily intended to create obstacles for these initiatives, delaying government and economic progress.

While the United States presents itself as a supporter of the Iraqi state, it enforces sanctions, fully aware that ordinary Iraqis will feel the impact first and foremost.

But why expend so much effort to isolate a group that plays a central role in Iraq’s government and military? The answer lies in US economic and strategic interests. If Washington intends for its companies to dominate or at least expand oil production operations in Iraq, those assets could become prime targets in any future regional wars.

The US remains the undisputed main supporter of “Israel” worldwide and has demonstrated influence over Israeli decision-making, despite official denials of such influence. US interests in the region, therefore, could be legitimate targets should Israeli hostilities resume, particularly if such interests threaten the flow of oil; the Yemeni strikes against Aramco in 2021 and 2022 being a notable example. Furthermore, curtailing the operational space of the PMF would indirectly benefit “Israel”, removing one less front to contend with, as the PMF previously delivered multiple blows against Israeli forces during the genocidal campaign in Gaza.

Can the US succeed?

A US plan to push Russian oil companies out of Iraq and curb the influence of the PMF could, in theory, succeed. In practice, however, it faces significant obstacles.

US sanctions against Russia have long been a primary tool of American economic pressure. Yet Moscow has repeatedly stated, and tested on the ground, that it has developed immunity to such measures.

Oil analyst Hamza al-Jawahiri told Shafaq News that these sanctions have little to no impact on Russian operations in Iraq. He added that major investment contracts create binding obligations for both Iraq and the Russian firms, making strict compliance with US sanctions neither necessary nor practical.

Additionally, one does not simply break ties with Russia. Despite its strong relationship with the United States, the current Iraqi administration remains cautious and strategic. Baghdad now seeks to maintain a balanced approach between the two powers, prioritizing its national interests in foreign relations. Investment from US companies is welcome, but interference in the operations of other firms or in Iraq’s relations with other countries will not be tolerated.

At the same time, Iraq has consistently rejected unilateral US actions targeting the PMF. Recognizing that the PMF is a key component of both the government and the military, Baghdad understands that endorsing such measures could destabilize the state, making any US-driven push against the PMF politically and practically unattainable.

Iraq: Between sanctions, oil, and sovereignty

The renewed US focus on Iraq signals more than a shift in diplomatic attention; it marks a recalibration of Washington’s regional strategy, one that relies less on military force and more on soft power. As Russia strengthens its energy foothold and the US reasserts its presence in Iraq’s oil and political sectors, Baghdad once again finds itself navigating between two global rivals.

Yet Iraq today is not the Iraq of 2003. The PMF, born out of the fight against terrorism, has become an integral part of the state’s security and political framework. Any attempt to sideline it risks shaking the very foundations of the Iraqi state.

Ultimately, the success of such a plan would rely on Baghdad, and whether it will continue its cautious pragmatism, or fall once again within the claws of US overreach.