Iraq fears 'collapse' for country if Trump blocks oil revenues

Amid escalating tensions between US and the middle east, Iraqi officials fear economic 'collapse' if Washington imposes additional sanctions. These penalties also include the blockage of US-based account where Baghdad keeps oil revenues that reportedly feed 90 per cent of Iraq's national budget. US President Donald Trump was angered by the Iraqi parliament who voted to remove foreign troops from the region along with nearly 5,200 American troops who have helped local soldiers in their fight against Islamist extremists since 2014. 

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The Central Bank of Iraq's account at the Federal Reserve Bank in New York was established in 2003 after US-led invasion toppled Saddam Hussein. Under United Nations Security Council Resolution 1483, the crippling global sanctions and oil embargo imposed on Iraq after Saddam's invasion of Kuwait were revoked and it also stated that all revenues from Iraqi oil sales would go to that account. An Iraqi official told an international agency that Iraqi Prime Minister Adil Abdul-Mahdi received a 'threatening' call from the US that it will 'block the account' in New York.

Iraq is Organization of the Petroleum Exporting Countries' (OPEC's) second-biggest crude producer and more than 90 per cent of the country's budget derives from revenues generated only through oil. Iraq's revenue reached $112 million in 2019, therefore, reportedly $1 to $2 billion in cash is flown in Iraq at least after every 30 days, from the Fed account. These amounts are required by the government for an official and commercial transaction. One Iraqi official told an international agency that the US decides to cut off these transactions, it 'means totally turning off the tap' and the other country's official said 'it would mean collapse for Iraq'. 

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US rejects Iran's request

US has rejected Iran's request on January 10 of preparing American troops for pulling out from the region. Seeking 'maximum pressure' on Iran, US also announced additional sanctions on Tehran responding to its attack on Iraqi bases housing US troops on January 8. The attacks on military bases in Iraq were Iran's response to the killing of its top commander Qassem Soleimani by Washington. 

The sanctions imposed on Iran target, eight senior Iranian officials. Pompeo during the press briefing reiterated that these officials were responsible for both the government’s violence abroad and the crackdown on protesters at home. He said that the US is striking the “heart” of Iran’s “inner security apparatus”. These sanctions also target one of the Supreme National Council and the commander of the Basij forces. 

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(With agency inputs)