Iraq's Gamble: Can Economic Ties to the US Work Without Disarming Iranian-Backed Militias?

Iraqi Prime Minister Ali al-Zaidi arrived in Washington this week for his first international trip since taking office in May 2026, bringing along a delegation of more than 70 officials—cabinet ministers, the central bank governor, national security advisers, and business leaders Al Jazeera. The visit signals a potential shift in how Iraq and the US work together.
Iraqi government spokesman Haider al-Aboudi described the trip as moving the bilateral relationship "from crisis management to a strategic economic partnership" — a way of saying Baghdad wants to build something that lasts beyond any one political moment Al Jazeera. Oil and gas deals are expected to dominate the agenda Reuters.
Energy is the priority. Baghdad wants to increase oil production and find new export routes that bypass the Strait of Hormuz — the narrow waterway where roughly 90 percent of Iraq's 3.4 million barrels per day in crude exports currently pass through Al Jazeera. That concern is concrete: the strait shut down briefly during the recent US-Israel war with Iran, cutting off Iraq's main revenue source.
Baghdad has proposed a joint energy and development fund with Washington, built around 500,000 barrels per day of oil exports initially, with the goal of eventually reaching two million barrels per day Al Jazeera. Al-Zaidi has announced a broader target to raise national output to seven million barrels per day within three years, up from the current 4.5 million Al Jazeera. Iraq is also seeking an $8 billion International Monetary Fund loan during the visit, according to sources cited by Al Jazeera Al Jazeera.
The structure of this arrangement—a fund tied to escalating export volumes with a large delegation—suggests Baghdad wants to lock the US into a long-term partnership with shared financial interests in Iraq's oil infrastructure. When two countries benefit equally from the same project, both tend to stay committed regardless of who leads them.
But economic cooperation is only half the story. US officials are expected to press Baghdad on disarming militia groups that answer to Iran rather than the Iraqi state, and on Iraq's broader approach to Tehran Al Jazeera. Al-Zaidi himself made this commitment in June during his first address to parliament, pledging that Iraq's state would hold exclusive control over all weapons Al Jazeera.
That pledge has already faced pushback. Iran-backed militias—the same groups that attacked US forces during the recent war—have rejected al-Zaidi's weapons-control declaration Al Jazeera. The Islamic Resistance in Iraq, an umbrella organization for these groups, issued a statement just hours before al-Zaidi left for Washington Al Jazeera — a show of timing that al-Zaidi's American counterparts will certainly have noticed.
This creates a core tension for al-Zaidi throughout his visit. Deep economic integration with the United States, at the scale Baghdad is proposing, becomes difficult to achieve while Iran-backed armed groups continue to operate outside state control. Trump's administration congratulated al-Zaidi on his nomination earlier this year Reuters, but goodwill does not resolve Iraq's structural problem: the government needs both American capital investment and Iranian tolerance to function, and those two requirements conflict when it comes to militia disarmament.
The $8 billion IMF loan request adds complexity. International Monetary Fund facilities typically include strict conditions—fiscal reform, cutting subsidies, banking transparency—domains where Iraq's bloated public payroll and informal financial systems have long drawn scrutiny Al Jazeera. Whether this request moves forward alongside the bilateral US-Iraq energy deal or gets folded into a larger package will shape the visit's actual outcome, since Fund programs and custom bilateral arrangements have often pulled in different directions.
What Iraq wins—or doesn't—by week's end will depend as much on Trump's appetite for the proposal as on al-Zaidi's negotiating skill. The scale of the delegation suggests Baghdad wants signed frameworks, not just a diplomatic statement. Watch for concrete answers on three questions: the fund's opening terms, any IMF commitment, and how directly the weapons control issue gets addressed in public statements. Those details will reveal whether al-Aboudi's "strategic economic partnership" can survive Washington's security demands.


