Why the United States Still Has Influence over Iraq’s Oil Revenues
Iraq’s oil income is closely tied to a financial arrangement established after the 2003 US-led invasion. Revenue from oil sales is deposited through an account at the Federal Reserve Bank of New York, giving Washington influence over the movement of Iraq’s dollar funds.
The system grew out of the Development Fund for Iraq, created during the occupation to manage oil revenue. Although formal arrangements have changed over time, the use of the New York account has continued to shape Iraq’s access to dollars and its dealings with the US financial system.
That dependence can carry political consequences. Access to oil proceeds and dollar transfers has been described as a source of leverage in US-Iraq relations, while the arrangement also affects Baghdad’s control over public finances. The management of Iraqi oil income remains tied to sovereignty, banking and the country’s postwar economic structure.
