US reportedly suspends dollar shipments to Iraq, WSJ reports

• US escalates pressure on Baghdad, halts dollar shipments and security programs.

The Trump administration has suspended shipments of US dollars to Iraq and frozen parts of its security cooperation with the Iraqi military, increasing pressure on Baghdad to dismantle powerful Iran-backed armed factions, according to The Wall Street Journal, citing Iraqi and US officials.

The newspaper reported that US Treasury Department officials recently blocked the delivery of nearly $500 million in US currency, proceeds from Iraqi oil sales held in accounts at the Federal Reserve Bank of New York.

The report said the move is part of broader US efforts to curb the influence of armed groups in Iraq, which Washington says are aligned with Iran. Reuters said it could not independently verify the claims, while the US Treasury Department and the Federal Reserve had not responded to requests for comment.

According to the WSJ, Washington has also informed Baghdad that it will suspend funding for certain counterterrorism and military training programmes until attacks by armed factions stop and Iraqi authorities take steps to dismantle the groups.

The development comes after the United States summoned Iraq’s ambassador earlier this month, following a drone strike on a major US diplomatic facility in Baghdad. Washington has blamed a series of recent attacks on what it describes as “terrorist militias” allied with Iran.