The U.S. position in Iraq is improving. But Baghdad’s alignment with Tehran continues to complicate the relationship. Commercially, the picture is genuinely positive: ExxonMobil, Chevron, and BP have returned to Iraq on contract terms far more favorable than the agreements that drove Western firms out a decade ago. Baghdad has actively courted this investment as a hedge against regional instability.
Politically, the picture has not shifted nearly as far. The Coordination Framework, the Iran-aligned Shia coalition, still controls both the Oil and Finance Ministries. A deputy oil minister has been alleged to serve as Tehran’s interlocutor inside the ministry itself. The Popular Mobilization Forces, a predominantly Shia paramilitary umbrella formally part of Iraq’s armed forces but largely loyal to Iran’s Supreme Leader, remain armed, state-funded, and outside Baghdad’s real control.
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