Iraq has been pressured by the U.S. Federal Reserve to 'suspend RMB settlement'—what impact does this have on the global trade landscape? How long might this suspension last?

The United States has deeply penetrated Iraq’s economy. Every day, approximately 3.5 million barrels of oil revenue must be deposited into an account held at the New York Federal Reserve Bank. These funds are not transferred to Iraq in cash form; rather, they are wired into Iraq’s accounts via transfers initiated by the Central Bank of Iraq. This means Iraq’s oil revenues are entirely under the control of the Federal Reserve. Any fund transfer or commercial settlement must receive prior approval from the Fed. As a result, Iraq remains perpetually passive in international trade. This is yet another example of the United States abusing its dollar hegemony. It is almost unimaginable that money earned by Iraq from selling oil does not flow directly into Iraqi bank accounts—but instead is effectively placed under the custody of the Federal Reserve, requiring explicit Fed approval before being released for Iraq’s export-related commercial settlements. This is utterly absurd—clear evidence that Iraq possesses no financial sovereignty whatsoever, with its entire economic and financial lifeline firmly in U.S. hands. The forced suspension of direct RMB settlement for trade is not merely direct interference in Iraq’s monetary policy, but also a stark manifestation of the dollar’s influence. At its core, this is a contest between the RMB and the dollar. Currently, the U.S. is especially anxious about the imminent collapse of dollar hegemony. Globally, de-dollarization is already gaining momentum—especially among BRICS nations and ASEAN member states, which are actively promoting intra-regional trade settlements in their own currencies. This trend poses a potentially fatal blow to the dollar’s share of global settlement. The dollar’s current share of global payments stands at only 58%. If major world economies achieve regional de-dollarization, the dollar’s settlement share will plummet dramatically—striking a fatal blow to the very foundations of dollar hegemony. Data shows China’s trade surplus in June hit a new all-time high.

The U.S. will withdraw its remaining troops from Iraq by September 30, ending its 23-year military presence there since 2003—does this signal America’s decline?

After Saddam Hussein’s fall in 2003, UN Security Council Resolution 1483 mandated that Iraq’s oil and gas export revenues be deposited into the 'Development Fund for Iraq (DFI)', held under international supervision at the New York Federal Reserve Bank. On the same day, President George W. Bush signed Executive Order 13303, placing the DFI and Iraq’s oil revenues under the protection of U.S. law—shielding them from creditor claims. In other words, all revenue Iraq earns from oil sales must be deposited in U.S. banks, subject to U.S. scrutiny and oversight, with the U.S. deciding annually how much to release to the Iraqi government. Given that oil accounts for 90% of Iraq’s fiscal revenue, the U.S. effectively controls Iraq’s economic lifeline through this mechanism—explaining why the Iraqi government has little choice but to comply with U.S. demands. Yet if U.S. forces fully withdraw, Iraq will inevitably raise this question: Why must I deposit my money in your bank account—and ask for permission every time I need to use it? What if I simply refuse to do so? Will you invade me again? In fact, domestic dissatisfaction over this arrangement has long simmered within Iraq. The country is now severely cash-strapped, facing chronic fiscal shortfalls and immense hardship—including frequent delays in salary payments to government-funded Shiite militias.

How the US Controls Iraq's Oil Revenues

1 day ago

The US maintains control over Iraq's oil revenues deposited at the Federal Reserve Bank of New York, exerting significant economic leverage. This financial arrangement continues despite troop withdrawals and recent sanctions aimed at curbing dollar access linked to Iran.

reuters

2026-09-29

How the US Controls Iraq's Oil Revenues

How the US Controls Iraq's Oil Revenues

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