Shafaq News
Rising tensions between Washington and Tehran are once again
testing Iraq’s fragile foreign-policy equilibrium, following US President
Donald Trump’s decision to impose a 25% tariff on any country conducting trade
with Iran. The move, designed to tighten economic pressure on Tehran and its
partners, comes amid one of the largest anti-government protests inside Iran in
years and renewed debate in Washington over how to respond to internal
instability in the Islamic Republic.
For Iraq, the announcement highlights a familiar dilemma,
but under increasingly rigid conditions. Baghdad has long promoted a policy of
“balance” between the United States and Iran. Yet Iraqi analysts, speaking to
Shafaq News, warn that this posture is no longer a matter of diplomatic
finesse, but a constrained reality shaped by domestic power structures,
economic dependence, and limited strategic autonomy.
Read more: Iraq between two fires: Tehran and Washington eye Baghdad’s post-election phase
According to Ihsan al-Shammari, head of the Political
Thinking Center, Iraq’s challenge lies less in external maneuvering than in
internal political arithmetic. He argues that Baghdad “does not enjoy the
freedom of choice often assumed by foreign policymakers,” noting that
Iran-aligned forces dominate Iraq’s political landscape and hold roughly 165
seats in parliament.
This reality, al-Shammari explains, sharply reduces the
government’s ability to adopt a genuinely neutral stance between Washington and
Tehran. Economic ties reinforce these constraints. Annual trade between Iraq
and Iran exceeded $13 billion in 2025, while Iranian companies maintain a
strong presence across the Iraqi market. More critically, Iraq relies on
Iranian gas and electricity imports to meet around 40% of its national power
needs.
Under these conditions, Washington’s latest decision forces
Baghdad to confront an increasingly narrow set of options: continue deep
economic and security engagement with Iran, or align more closely with the US
“maximum pressure” strategy, at the risk of domestic political backlash and
internal instability.
Ahmed al-Yasseri, head of the Arab-Australian Center for
Strategic Studies, links Iraq’s room for maneuver to the nature of political
leadership emerging from the Coordination Framework, the umbrella grouping of
Iran-aligned Shiite ruling forces.
If Iraq’s governing elite adopts an escalatory posture,
al-Yasseri warns, “maintaining balance will become nearly impossible,
potentially drawing the country into direct confrontation. By contrast, a more
pragmatic leadership —modeled on figures such as caretaker Prime Minister
Mohammed Shia al-Sudani or former premier Haider al-Abadi— could preserve a
narrow margin of neutrality and keep Iraq outside the immediate circle of
targeting.”
“Iraq is not currently within the circle of direct
targeting,” al-Yasseri said, “but any clear economic or security alignment with
Iran could alter that equation.”
This assessment suggests that Iraq’s relative insulation
from US punitive measures is conditional rather than permanent, hinging as much
on political signaling as on policy substance.
Read more: US strategy 2026: Containment or military strike for Iraqi armed factions
Within Iran-aligned political circles, a similar
acknowledgment emerges, albeit framed differently. Aref al-Hammami of the State
of Law Coalition, led by Nouri al-Maliki, argues that recent US decisions have
triggered global discontent, even among Washington’s allies, describing them as
impulsive and detached from political realities.
Despite this criticism, al-Hammami concedes that Iraq cannot
sever ties with the United States, calling engagement with Washington a “given
reality.” At the same time, he insists that disengagement from Iran is neither
realistic nor feasible. “Geographic proximity, intertwined markets, and deep
political connections make any political or economic rupture with Tehran
impossible.”
With a significant segment of Iraq’s political class viewing
relations with Iran as non-negotiable, Washington sees this as complicating
sanction-based strategies that assume Baghdad can recalibrate its alliances
without internal cost.
Imad al-Musafir, a political analyst close to the
Coordination Framework, frames Iraq’s balancing act not as submission to
external pressure but as a long-term strategic posture rooted in resistance to
foreign dominance. He argues that Iraq is not a marginal actor reacting to
regional dynamics, but an integral part of a broader axis opposing political
and economic coercion.
“Resistance is not an emotional reaction or improvised
rhetoric,” al-Musafir told Shafaq News. “It is a calculated strategic choice
managed through state institutions and guided by considerations of public
stability and national interest.” From this perspective, Iraqi sovereignty
cannot be exchanged for sanctions relief or temporary incentives, regardless of
changing US administrations.
Beyond politics, Iraq’s vulnerability is most visible in the
energy sector. The country imports Iranian gas to generate roughly 8,000
megawatts of electricity, accounting for about 40% of national demand. Recent
supply disruptions —driven by declining Iranian reserves and rising winter
consumption— have already exposed the
fragility of this dependence.
In response, Baghdad has moved to diversify its energy
sources, signing agreements with Qatar and Turkmenistan and investing in
domestic renewable projects expected to add around 3,000 megawatts over the
next three years. France’s TotalEnergies has also committed to building a
1,000-megawatt solar power plant in Basra at a cost of $820 million.
These initiatives signal intent but offer no immediate
relief, leaving Iraq exposed in the short term to both Iranian supply decisions
and shifting US policy.
The impact of Washington’s tariffs extends beyond Iraq.
Countries such as the United Arab Emirates and Oman —both major trade partners
of Iran— also face indirect pressure. Iraq’s position, however, remains
uniquely precarious due to the scale of its economic ties to Tehran and the
internal political forces shaping its decision-making.
Ultimately, Iraq’s so-called balance policy appears less a
deliberate strategy than a forced compromise imposed by domestic power
structures, ideological boundaries, and material dependence. For now, Baghdad
remains outside the immediate line of fire. Whether it can stay there will
depend not only on pressure from abroad, but on choices —and constraints— at
home.
Read more: Surprise operations lead key scenarios for Iraq and the region amid US escalation
Written and edited by Shafaq News staff.
