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US threatens to cut Iraqi access to oil revenues if Baghdad insists

by Ace Damon
US threatens to cut Iraqi access to oil revenues if Baghdad insists

Iraq could lose access to its dollar accounts if it insists on withdrawing US troops from its territory. After passing a law allowing Baghdad to request the withdrawal of foreign forces, Donald Trump threatened to respond with sanctions.

Iraqi lawmaker Majida al-Tamimi, a member of the parliament's Finance Committee, said that if Iraq insists on withdrawing troops, it could lose access to its funds deposited in US central bank accounts.

In addition, she points out that the United States could put pressure on certain companies to stop their activities in the Iraqi oil industry. The Arab country is the second largest world producer of OPEC.

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                    AP Photo / Nabil al-Jurani

Iraqi Worker at Nihran Bin Omar Oil Field, South of Baghdad (photo file)

The State Department had already warned the Iraqi government that it could block its access to US deposited funds, as reported to Bloomberg.

On January 5, the Iraqi parliament passed a law authorizing the government to request the withdrawal of foreign forces from the country. The move, interpreted by many as directed at the United States, led Donald Trump to threaten Baghdad with sanctions:

"If they ask us to leave, and if it is not done in a very friendly manner, we will impose the toughest sanctions they have ever seen, which will make the sanctions against Iran seem mild," threatened the US president.

Since then, the US has not responded to Baghdad's requests to negotiate a possible withdrawal process.

The immediate effect of blocking Iraq's dollar bills would be a sharp devaluation of the Iraqi currency, the dinar.

Eventually, the Iraqi government would have to convert its business transactions to euros, which would require lengthy negotiations with European banks, Tamimi said.

Iraq was the target of a severe financial and trade embargo between 1990 and 2003, when the US deposed Saddam Hussein.

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                    AP Photo / Jassim Mohammed

Iraqi trades Iraqi dinars for dollars shortly after UN Security Council lifted 10-year embargo (archive photo)

The sanctions imposed by the UN Security Council sparked one of the most serious humanitarian crises of the 1990s, and included the creation of emergency programs such as "oil for food".

(tagsToTranslate) US military presence in the Middle East (t) US troops in Iraq (t) Iraqi parliament adopts measure to withdraw foreign troops from country (t) economic sanctions (t) oil resources

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