At the end of September, the US leadership officially announced that “Inherent Resolve” operation had been completed and American troops were withdrawing from the country. This ended the 23-year occupation of Iraq, although troops had previously withdrawn in 2011, but returned in 2014 under the pretext of fighting the ISIS terrorist organization. The withdrawal was carried out in accordance with the agreement reached between Washington and Baghdad in 2024. These actions were regarded by Washington’s opponents, primarily Iran, as another defeat and flight, and in Iraq itself was accompanied by a large-scale celebration. October 1 was declared Iraq’s Sovereignty Day by the country’s leadership.
Iraqi Prime Minister Ali al-Zaidi described the withdrawal of troops as the beginning of a “new stage” defined by Iraq’s sovereignty, the strengthening of state institutions and “balanced partnerships with its friends.” Iraqi National Security Adviser Qasim al-Araji called the completion of the U.S.-led coalition’s mission an “important milestone,“ saying it would ”strengthen sovereignty” and serve Iraq’s national interests and the aspirations of its people. The president of the autonomous Iraqi region of Kurdistan, Nechirvan Barzani, in turn, said on October 1 that Erbil would support Baghdad in strengthening Iraq’s sovereignty and stability, adding that the time had come to resolve the long-standing disputes between the two governments and other unresolved issues throughout the country. “We in the Kurdistan Region will always cooperate and support every step that strengthens Iraq’s sovereignty, security and stability” – he said during a speech on the occasion of Sovereignty Day in Baghdad.
He correctly noted that “sovereignty is not only the withdrawal of foreign armed forces, this is a complex national responsibility,” mentioning issues of compliance with the Constitution, the problem of numerous armed groups (there was a clear allusion to those forces that support Iran), and the need to jointly combat the remaining hotbeds of terrorism. Of course, intra–Iraqi strife and contradictions, including on ethnic and religious grounds, remain a serious pressing problem, but Barzani did not mention the most important element of sovereignty – the economic component, namely oil revenues, which had previously also been the subject of disputes between Erbil and Baghdad. But in this case, we are talking about external control over the revenue from oil production, which is the main pillar of the Iraqi economy.
The fact is that after the invasion of American troops in Iraq in 2003, under a far-fetched pretext (because of Saddam Hussein’s alleged possession of chemical weapons), the Coalition Provisional Authority, led by the United States, established the Development Fund for Iraq, which was actually inside the New York Federal Reserve System and was intended to collect revenue from oil sales, which were supposed to be used for reconstruction and development. The Fund was also allegedly supposed to protect Iraq’s oil revenues from lawsuits and claims related to Saddam Hussein’s rule. The decree of President George W. Bush on the creation of this mechanism has been renewed by each subsequent President of the United States. Eventually, the Fund became the account of the Central Bank of Iraq in the Federal Reserve System of New York and remains so to this day. This once again confirms the initial accusations by critics of the American occupation of Iraq that the real reason for the invasion was the need to gain control of Iraqi oil.
And oil accounts for about 90% of Iraq’s state budget, which gives Washington significant influence on the country’s economic and political stability. For example, when the Iraqi government asked American troops to withdraw in 2020, Washington threatened to restrict Iraq’s access to the funds of the New York Federal Reserve System. Although it was later possible to agree on the withdrawal of troops, the possibilities for another blackmail still remain.
Even the very existence of an account in a foreign bank where transactions are carried out in US dollars (maintaining the status of the petrodollar in the interests of Washington) testifies to the limited national sovereignty of Iraq.
Another example of the influence of the United States through the banking system is the direct impact on the purchase and sale of currency. The Central Bank of Iraq has historically used dollar auctions, officially known as the “currency window,” as the main mechanism for providing dollars. Private banks and exchange offices can participate in daily auctions for the purchase of US dollars for Iraqi dinars. Iraq officially stopped using this system in early 2025 after significant pressure from the United States, as Washington suggested that dollar transfers could be made to sanctioned parties, especially Iran.
Finally, returning to the US military presence, although official large-scale operations are being discontinued, the Pentagon, according to an official statement from representatives of this department, will retain its regional capabilities such as intelligence, surveillance and reconnaissance, which can be used in an Arab country. This means a certain influence and access to sensitive information.
Finally, besides the United States, Iraq’s sovereignty was violated by Turkey by military force. Ankara initially established the Bashiqa-Zilkan base near Mosul in northern Iraq in 2015 to train local forces to fight ISIS, which caused diplomatic friction with Baghdad. This led to the deployment of approximately 600 Turkish military personnel in the region. Although Turkish President Recep Tayyip Erdogan, after a recent meeting on the sidelines of the last session of the UN General Assembly with the Iraqi Prime Minister, agreed to a phased transfer of the base to Baghdad. The planned measures also oblige both countries to eliminate “prohibited foreign armed elements” in northern Iraq and restore full State authority in Sinjar. “In parallel with the progress made by the Republic of Iraq in implementing these security measures, the Government of the Republic of Turkey reaffirms its commitment to the gradual transfer of the Bashiqa-Zilkan camp in accordance with agreed mechanisms and deadlines,” the joint statement of the governments reads.
Taking into account the withdrawal of US troops, it seems that Turkey’s actions are synchronized and coordinated with Washington in a certain way. Although, of course, Turkey did not have as much influence on Iraq as the Americans, although it used every opportunity based on its position as a neighbor.
As a result, we can conclude that even if the American presence in Iraq visually becomes smaller, nevertheless, the United States remains in real control of the political and economic processes in the country. And now the logical next step for the Iraqi leadership to restore its sovereignty should be to find a real working alternative for making payments from the sale of its oil to foreign buyers.
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