US blocks Iraq’s dollar shipments in bid to squeeze Iran-backed militias — WSJ

Members of an Iraqi Shiite militant group attend a funeral of a fighter with the Kataeb Hezbollah, who was killed in a US airstrike in Basra province south of Baghdad, Iraq, April 8, 2026. (AP Photo/Hadi Mizban)
Members of an Iraqi Shiite militant group attend a funeral of a fighter with the Kataeb Hezbollah, who was killed in a US airstrike in Basra province south of Baghdad, Iraq, April 8, 2026. (AP Photo/Hadi Mizban)

US President Donald Trump’s administration has halted US dollar shipments to Iraq and frozen security cooperation programs with its military, as it presses Baghdad to dismantle Iranian-backed militias operating in the country, the Wall Street Journal reports, citing Iraqi and US officials.

US Treasury Department officials recently blocked a delivery of nearly $500 million in US banknotes — the proceeds of Iraqi oil sales — from accounts at the Federal Reserve Bank of New York, the Journal says.

Washington has also informed Baghdad it is suspending funding for some counterterrorism and military training programs until militia attacks end and Iraqi authorities take steps to dismantle armed groups, the report adds.

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