Iraq's PM Faces Militia Resistance Over State Control Order as US Suspended Dollar Shipments in April
Updated
Updated · The New York Times · Jun 25
Iraq's PM Faces Militia Resistance Over State Control Order as US Suspended Dollar Shipments in April
3 articles · Updated · The New York Times · Jun 25
Summary
Ali al-Zaidi, who became prime minister in late April, has run into stiff resistance after ordering all armed groups last month to submit to direct state authority.
U.S. pressure drove the push: Washington suspended Iraq's dollar shipments from oil sales and halted funding for security services, demanding a crackdown on militias and more distance from Iran.
Kataib Hezbollah is among the strongest groups rejecting the order; the Iran-linked militia has attacked U.S. targets in recent months and claimed high-profile kidnappings, including a U.S. journalist in Baghdad this year.
The standoff extends Iraq's long struggle between its two main allies, the United States and Iran, and past efforts to tighten state control over militias have also failed.
How can Iraq's leader control militias that are legally part of the state and also a powerful shadow government?
Can a businessman with no political past succeed in disarming powerful militias where all his predecessors have failed?
Iraq 2026: U.S. Dollar Restrictions, Militia Power Struggles, and the Battle for State Control
Overview
In April 2026, the United States launched 'Operation Economic Fury' to intensify financial pressure on Iraq, making its support conditional on Baghdad's actions. This led to concerns over the supply of physical dollars, causing uncertainty in Iraq’s financial markets and a sharp decline in the Iraqi Dinar. Traders hesitated to sell dollars, fearing a continued freeze on cash supply. These moves aimed to push Iraq’s government to curb Iran-backed militias, highlighting the link between US financial leverage and demands for greater Iraqi state control, while exposing Iraq’s vulnerability to external economic pressure and internal power struggles.