The Iraq Report: Iraq finds itself between the competing interests of US and Iran

Tensions between the United States and Iran have been skyrocketing in the Arabian Gulf over the past few weeks as the two powers clash over Tehran's suspected nuclear capabilities and Washington's insistence on scuppering what is left of the Iran nuclear deal.

Considering Iran's overbearing influence on its Western neighbour, Iraq has now found itself between the competing interests of the ailing but still pre-eminent global power, the US, and its regional adversary, Iran.

Domestically, Iraq is still struggling with corruption despite years of protests and promises by political players such as Muqtada al-Sadr, whose coalition won the most seats in the first half of 2018.

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Protests organised by the Sadrists have led to violence and deaths, showing that we are perhaps on track for yet more flaring Iraqi tempers in the now almost annual street demonstrations when the summer heat kicks in again. 

Soleimani to Shia militias in Iraq: 'Prepare for proxy war'

The shadowy commander of Iran's Islamic Revolutionary Guard Corps' (IRGC) Quds Force, Major General Qassem Soleimani, was reported to have told Iraqi Shia extremists loyal to him to "prepare for proxy war", according to The Guardian. 

Although Soleimani's speech at a meeting with IRGC proxies in the Iraqi capital Baghdad was reported on Thursday, it appears that his address actually occurred approximately three weeks ago. It is believed that the intelligence referred to an increased Iranian threat to American interests, which the White House claims is partly related to Soleimani's actions in Iraq.

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At the beginning of this month, National Security Adviser John Bolton and other top American officials announced that an aircraft carrier strike group – including B-52 Stratofortress bombers being deployed separately to Qatar's Udeid Airbase – had been deployed to the Arabian Gulf to counter unspecified Iranian threats to US interests.

While it was assumed that these moves were connected to US President Donald Trump's "maximum pressure" strategy to force Iran to renegotiate the terms of the now largely dead Iran nuclear deal, it was not clear to what extent or even if this was simply Washington engaging in gunboat diplomacy.

Days after the announced deployment, Secretary of State Mike Pompeo made an unannounced visit to Iraq to meet with Prime Minister Adel Abdul Mahdi and other senior figures in the Iraqi government. According to Pompeo, Iraqi leaders had assured him that Iraq would protect American interests and "understood that was their responsibility".

But it would seem that the United States rapidly lost faith in Iraqi leaders' abilities to keep their interests secured.

The US Embassy in Iraq first issued a security warning to all its citizens planning to travel to Iraq last Sunday. Days later, the State Department ordered all non-essential personnel to leave its embassy in Baghdad and its consulate in Erbil, citing security concerns.

It now seems highly likely that these concerns are connected to Soleimani's activities in Iraq and his meeting with the leaders of all the various factions that comprise Iraq's Popular Mobilisation Forces, an umbrella organisation of largely pro-Iran militias. The PMF has been recognised as a formal part of the Iraqi armed forces for a number of years now.

The PMF are reported to be able to field anything between 150,000 to 180,000 men divided into commands controlled by the dozens of organisations that comprise the force

The IRGC sponsors, trains, and arms scores of sectarian Shia extremist groups in Iraq, Syria, Lebanon and elsewhere. The PMF are reported to be able to field anything between 150,000 to 180,000 men divided into commands controlled by the dozens of organisations that comprise the force. During the war against the Islamic State group [IS], the PMF were repeatedly in the spotlight for perpetrating sectarian atrocities against Sunni civilians, war crimes and crimes against humanity.

As Iranian proxies, these Iraqi militants can be activated at any time. Considering US force deployment in Iraq stands at around 5,000 troops, they are severely outgunned, outmanned, and cannot rely on the Iraqi government for security as Iraqi security apparatuses are also staffed by Iranian proxies, particularly the federal police force which is controlled by the Badr Organisation, a known IRGC affiliate led by Hadi al-Amiri.

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By calling on pro-Iran militants to prepare for proxy war, Soleimani and Iran significantly ratcheted up tensions with an already bellicose and belligerent American administration.

This also had a knock-on effect of encouraging US allies to make their own moves, with the Netherlands and Germany both backing out of training programmes with the Iraqi military and British Foreign Minister Jeremy Hunt tweeting that Britain shared the US' threat assessment of Iran's activities, directly contradicting a British general who said there was no heightened threat from Iran.

Still, analysts believe that the latest bout of sabre-rattling and posturing by both sides is unlikely to lead to war against Iran. 

Turkey forced to seek Iraq's oil riches

In news related to Iraq's other powerful regional neighbour, Turkey, Prime Minister Mahdi visited the Turkish capital Ankara on Wednesday to hold bilateral talks with Turkish President Recep Tayyip Erdogan.

The two leaders agreed to increase cross-border trade, reopen the defunct Kirkuk-Ceyhan oil pipeline, increase Turkish support for Iraq's short-term electricity needs, and to work together to "combat terrorism" emanating from both IS and the banned Kurdistan Workers' Party, better known as the PKK.

"We will never accept any security threat against Turkey stemming from the territory of Iraq," Mahdi said at the conclusion of the talks in direct reference to PKK activities in Iraq, where they are based in the Kandil Mountains. It is unclear what the Iraqi government could do against the PKK who operate in areas controlled by the autonomous Kurdistan Regional Government [KRG].

Both countries have been impacted by the White House's decision to end waivers for sanctions it re-imposed on Iran's banking and energy sectors that have bitten deeply into Iranian coffers.

Provided regional actors could wean Iraqi politicians off Iran's payoffs and influence, Turkey could be a primary beneficiary of Iraq's oil wealth, further marginalising Tehran's role in the region

While energy rich itself, Iraq is dependent on Iranian electricity exports due to long-term neglect of its power grid and endemic corruption that has prevented any effective modernisation from taking place.

Turkey, on the other hand, is not rich in fossil fuel natural resources and is one of Iran's largest customers for oil. With waivers having ended, the Turks must find alternate sources of these vital resources.

Iraq's oil wealth is vast and, if properly utilised and freed from the corruption that has been hollowing out the Iraqi state for 16 years since Saddam Hussein's Baathist dictatorship was toppled, could bring in hundreds of billions of dollars in revenue.

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While Iran's oil infrastructure is less ravaged by war and a crippling sanctions regime that impoverished Iraq throughout the 1990s until the US-led invasion in 2003, US sanctions against Iran could have opened a new door for Iraq to enhance its oil sales and standing within the international oil cartel, OPEC.

After waivers were cancelled and tensions between the US and Iran increased earlier this month, Reuters reported that Iraq was close to signing a $53 billion deal with oil giants Exxon Mobil and PetroChina.

The deal, which would last for 30 years, was expected to make Iraq $400 billion, according to Prime Minister Mahdi who announced the two oil companies would be contracted to develop Iraq's oil fields and infrastructure in southern Iraq.

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While Mahdi denied that this deal was in any way related to US pressure against Iran, it seems that Iraq is poised to reap the profits that Iran will be missing out on. Provided regional actors could wean Iraqi politicians off Iran's payoffs and influence, Turkey could be a primary beneficiary of Iraq's oil wealth, further marginalising Tehran's role in the region.

Anti-corruption deaths hint at hot summer of protests

Rampant corruption is still a pressing issue in Iraq as four protesters demonstrating against lack of government action against graft were killed on Thursday in the Shia holy city of Najaf. 

Hospital and local staff in the southern Iraqi city said four people died after a demonstration turned violent when a mall was burned down overnight, AP reported on Thursday.

Najaf province's security command arrested five mall guards who had shot at the demonstrators, while at least 17 people were wounded and are being treated at the city's Hakim Hospital.

Guards at the Bashir Mall opened fire on a crowd of supporters of populist Shia cleric Muqtada al-Sadr who held a demonstration against his former aide, Kadhum al-Issawi, close to the shopping centre.

Sadr had earlier condemned corruption in the country and fired al-Issawi over alleged graft.

Sadr's office said the demonstrators were protesting against corruption, which is rampant in the country.

As corruption and graft have yet to be tackled in Iraq, it would seem likely that we are in for yet another hot summer of protests.

Demonstrations against corruption, lack of basic public services, water pollution and state violence have occurred almost annually in Iraq, even during the war against IS. The southern Shia-majority provinces were largely unaffected by the fighting and could therefore focus on woes which were closer to home.

These mass protests have raised hopes that a cross-sectarian consensus and national action movement can be formed to combat the rife corruption that besets Iraqis of all persuasions.