By Maha El Dahan, Timour Azhari and Humeyra Pamuk
DUBAI/WASHINGTON, Jan 23 - Washington has threatened senior Iraqi politicians with sanctions targeting the Iraqi state — including potentially its critical supply of oil revenue sourced via the Federal Reserve Bank of New York — should Iran-backed armed groups be included in the next government, four sources told Reuters.
The warning is the starkest example yet of U.S. President Donald Trump's campaign to curb Iran-linked groups' influence in Iraq,
which has long walked a tightrope between its two closest allies, Washington and Tehran.
The U.S. warning was delivered repeatedly over the past two months by the U.S. Charges d'Affaires in Baghdad, Joshua Harris, in conversations with Iraqi officials and influential Shi'ite leaders, including some heads of Iran-linked groups via intermediaries, according to three Iraqi officials and one source familiar with the matter who spoke to Reuters for this story.
Harris and the embassy did not respond to requests for comment. The sources requested anonymity to discuss private discussions.
Since taking office a year ago, Trump has acted to weaken the Iranian government, including via its neighbor Iraq.
Iran views Iraq as vital for keeping its economy afloat amidst sanctions, and has long using Baghdad’s banking system to skirt the restrictions, U.S. and Iraqi officials have said. Successive U.S. administrations have sought to choke that dollar stream, placing sanctions on more than a dozen Iraqi banks over the past years in an effort to do so. It has never curtailed the dollar flows from the New York Fed to the Central Bank of Iraq.
"The United States supports Iraqi sovereignty, and the sovereignty of every country in the region. That leaves absolutely no role for Iran-backed militias that pursue malign interests, cause sectarian division, and spread terrorism across the region," a U.S. State Department spokesperson told Reuters, in response to a request for comment.
The spokesperson did not answer Reuters questions about the sanction threats.
Trump, who bombed Iran's nuclear program in June, threatened to again intervene militarily in the country during protests last week.
Iraqi Prime Minister Mohammed Shia al-Sudani's office, the Central Bank of Iraq and Iran's mission at the United Nations did not respond to requests for comment.
(Reporting by Maha El Dahan, Timour Azhari and Humeyra Pamuk; Additional reporting by Ahmed Rasheed; Editing by Frank Jack Daniel)
