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U.S. Restarts Shipments of Dollars to Iraq, Pausing Pressure

The Trump administration had halted the deliveries as part of its efforts to pressure the Baghdad government to distance itself from Iran.

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By Raja Abdulrahim and Falih Hassan

July 2, 2026

The United States has resumed some air shipments of U.S. dollars to Iraq, several months after it suspended them in a bid to pressure the government to distance itself from Iran, according to two aides to Iraq’s prime minister.

The Trump administration stopped the flow of dollars to Iraq’s cash-based economy in April, withholding the country’s own money earned from oil sales. It was an extraordinary measure in light of the longstanding alliance between the two countries.

At the time, Iraqi officials said Washington had also suspended cooperation with and funding for Iraq’s security services. These measures remain in place, according to another Iraqi official, who spoke on the condition of anonymity because he was not authorized to discuss the matter publicly.

The punitive measures were taken at a moment when Iraq was in the process of selecting a new prime minister and the United States was trying to block candidates viewed as sympathetic to Iran. Washington was also demanding that Iraq’s government rein in an array of Iranian-linked militias that operate largely outside government control and have periodically attacked U.S. targets in the country.

“The dollar shipments to Iraq have resumed,” said Haider al-Aboudi, a spokesman for Iraq’s new prime minister, Ali al-Zaidi, adding that “the problem has been resolved.” Mudhar Muhammad Salih, a financial adviser to the prime minister, confirmed resumption of the transfer.

The United States confirmed that the shipments had resumed, according to a person familiar with the matter, who said that the transfers of dollars were affected by the Iraqi central bank’s needs, security considerations and concerns over illicit finance issues. The person requested anonymity to discuss sensitive diplomacy.

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