US officials told Iraqi leaders Washington would starve Baghdad of oil revenue if it kept up economic links with Iran and would suspend ties if politicians deemed close to Iran became ministers, Reuters reported on Friday citing sources.
The warnings would mark a sharp uptick in rhetoric on Iraq by the administration of US President Donald Trump as it pursues its maximum pressure campaign of sanctions against its Mideast arch-nemesis Iran.
Citing three Iraqi officials and a source familiar with the matter, the news agency reported that US Charge d'Affaires in Baghdad Joshua Harris conveyed the warnings in conversations over the past two months with Iraqi officials from across its fractured political spectrum.
Iran relies closely on the banking sector its Western neighbor, where recent parliamentary polls kept Shi'ite Muslim parties in the ascendant and delivered gains for politicians from the kaleidoscope of militias and parties backed by Tehran.
The Islamic Republic's own economic lifeline of oil exports is under heavy pressure from US sanctions, even if export levels remain buoyant one year into Trump's second term, and Iraqi financial instruments help it skirt US curbs.
Following a 2003 US invasion, the United States has maintained de facto control over Iraqi oil revenues and its preponderant banking and financial puts the funds within its reach.
"The United States supports Iraqi sovereignty, and the sovereignty of every country in the region," Reuters quoted a US State Department spokesperson as saying in response to a request for comment. "That leaves absolutely no role for Iran-backed militias that pursue malign interests, cause sectarian division, and spread terrorism across the region."
US warnings also broached cutting off engagement with Baghdad if 58 members of parliament Washington views as linked to Iran are elevated by Prime Minister Shia al-Sudani to cabinet positions.
"The American line was basically that they would suspend engagement with the new government should any of those 58 MPs be represented in cabinet," Reuters quoted an Iraqi officials as saying.
"They said it meant they wouldn't deal with that government and would suspend dollar transfers," the source added.
Forming the new cabinet is due to take months and the US moves did not appear to be linked to a recent deadly crackdown on protestors in Iran, which resulted in new US sanctions on Iranian officials and oil shipping networks.
