Washington Wants Iraq, But Tehran And Beijing Won’t Let Go

The Ties Already Baked In

Notably, Iraq and Iran fought each other for eight years in the 1980s, a war that killed hundreds of thousands — by some estimates close to a million — on both sides. Since the U.S. invasion toppled Saddam Hussein in 2003 and installed Shia-led governments in Baghdad, Iraq has built deep political, religious, and economic ties with the same neighbor it once fought, including a national electricity grid that has run for years on imported Iranian power and gas.

The first Trump administration granted Iraq a waiver to keep buying that Iranian electricity despite sanctions; the second Trump administration let the waiver lapse in March 2025, part of its broader “maximum pressure” campaign on Iran. Iraq’s Ministry of Electricity has warned that losing the parallel gas waiver too would strip out another 30% of the country’s power supply.

China’s position runs just as deep. Somewhere between half and two-thirds of Iraq’s oil production now comes from fields where Chinese companies hold a stake as investors, operators, or field-services contractors, according to the Dutch think tank Clingendael. While the oil belongs to Iraq, it pays foreign firms to develop and run the fields—with Chinese state companies operating many of them.

China has also long been Iraq’s largest single buyer of crude oil, though monthly trade figures have swung sharply over the past year.

Iraq found out this year just how exposed that position leaves it. When the U.S. and Israel struck Iran on February 28, 2026, and Tehran closed the Strait of Hormuz in retaliation, Iraq—unlike Saudi Arabia and the UAE, the only two Gulf producers with pipelines that bypass the Strait—watched its own oil exports collapse from roughly 4.5 million barrels a day to a low of 1.4 million in May. That’s purely a result of being a bystander in someone else’s war.

So Iraq isn’t weighing an abstraction. It has an Iranian relationship running through its power grid, its parliament, and its armed factions and a Chinese connection running through its wellheads and its export contracts. And it is now trying to layer an ambitious new American relationship on top of both—one that Washington’s own doctrine describes as a matter of national security rather than ordinary commerce.

Al-Windi said Iraq doesn’t need to choose a lane. Chinese companies, he argues, “helped maintain Iraqi production at a difficult time and should not now be pushed aside simply because Baghdad is seeking greater Western involvement.” In his eyes, Baghdad has leverage—not potential liabilities.

“China also uses political, economic, and social influence to protect its interests,” he told me. “At the same time, Iraq wants greater participation from American and other Western companies. This will inevitably create competition and some resistance from established Chinese interests.”

Whose Choice Is This, Really?

Former Prime Minister al-Maliki’s episode suggests the friction runs deeper than competition over contracts. Washington didn’t simply wait for Iraq to pick a prime minister and then negotiate with whoever won; instead, it has turned up the heat on Iraqi neutrality itself, one waiver, one militia, one candidacy at a time. On this view, the deals signed in Washington and Houston are Iraq’s reward for realigning with the West even before Prime Minister al-Zaidi landed in the U.S.

“Strengthening relations with the United States is widely understood as a national interest” across a political map that agrees on almost nothing else, Al-Windi told me. Indeed, its domestic coalition spans Shiite, Sunni, and Kurdish political blocs.

That’s a broad, durable domestic consensus, not simply an arrangement imposed from outside—even if Washington helped clear the path. And the Chinese relationship long predates the current pressure campaign; it was built when Western majors walked away from Iraq’s oilfields.

The realistic test of Iraq’s position, then, isn’t whether Baghdad formally picks a side. Prime Minister Al-Zaidi’s arrival in office shows how much Washington can shape that choice without Iraq ever officially declaring one. The narrower, more mechanical test is whether the militias actually disarm by September 30, whether the electricity and gas waivers survive in some form, and whether Chinese production contracts get renegotiated or simply continue running alongside the new American ones.

Al-Windi insists that Iraq can walk this tightrope: “Iraq’s strategic advantage lies in careful neutrality,” he said. “Choosing sides too sharply would create obstacles and make it harder for the government to deliver on its economic promises.”

That’s the bet behind Iraq’s strategy: that it can stay useful to Washington, Tehran, and Beijing at once, rather than beneficial to only one of them. Washington’s own doctrine cuts against that hedge: it treats its commercial presence abroad as a national-security asset—and may ask Iraq to choose a team.