“Iraq’s oil is at Trump’s disposal”… Why does this controversial question recur annually?
“Iraq’s oil is at Trump’s disposal”… Why does this controversial question recur annually?
2026-06-29
Shafaq News – Special Report
Every time an American president renews the state of emergency concerning Iraq, the same question resurfaces: “Does the United States control Iraqi oil revenues?”
US President Donald Trump’s decision to extend the national emergency related to Iraq for another year has reignited political and economic debate within the country, especially with the circulation of information indicating that all Iraqi oil revenues have become “under the control” of Washington in an account at the Federal Reserve in New York.
Despite the controversy that recurs annually with each extension of the US executive order, most experts agree that the decision does not grant Washington ownership or the right to dispose of Iraqi oil revenues, but rather maintains a legal system that was established in exceptional circumstances after 2003.
However, the continued operation of this system for more than two decades opens up, in contrast, a broader discussion within Iraq about when to move to a stage where the state is able to protect its financial assets on its own, away from any exceptional arrangements imposed by the post-war stage.
What does Trump’s decision mean?
According to the executive order sent by the US President to Congress on May 4, 2026, the extension of the state of emergency came because the conditions related to the stability of Iraq still represent an “unusual and extraordinary threat” to the national security and foreign policy of the United States.
Trump confirmed that the state of emergency, first declared on May 22, 2003, under Executive Order 13303, will remain in effect after May 22, 2026.
This order was issued after the American invasion of Iraq, based on the International Emergency Economic Powers Act, with the aim of removing obstacles to the reconstruction of Iraq, restoring security, and protecting Iraqi assets located within American jurisdiction.
Since that date, all American presidents, both Republicans and Democrats, have renewed this decision annually.
Where does the oil money go?
Financial expert Mohammed Al-Hassani explained to Shafaq News Agency that the revenues from Iraqi oil exports are deposited, according to financial mechanisms approved since 2003, into a special account at the Federal Reserve in New York, managed by the Central Bank of Iraq.
Al-Hassani said the aim of this arrangement is to protect Iraqi funds from lawsuits and seizure procedures that they may be exposed to abroad, and not to place them at the disposal of the United States.
He added that renewing the executive order is a routine procedure that is repeated every year, and does not mean that Washington seizes or manages oil revenues, stressing that the funds remain the property of Iraq and are used to finance the general budget after the completion of the approved financial procedures.
Al-Hassani pointed out that all the external accounts managed by the Central Bank of Iraq are currently held at the US Federal Reserve, explaining that the global financial system is based on mutual protection between central banks, and that the United States has never in modern history seized central bank funds deposited with the Federal Reserve.
When will this system end?
Al-Hassani suggested that ending this mechanism is not a simple political decision, but rather requires extensive legal and financial treatment, in addition to providing international alternatives that grant Iraqi assets the same level of protection from lawsuits.
He stressed that any transition to a new system should be within the framework of international understandings that guarantee that Iraqi funds will not be subject to seizure or confiscation in the future.
For his part, Professor of International Economics Nawar Al-Saadi believes that extending the state of emergency does not mean imposing a new American trusteeship on Iraq, but rather continuing a legal framework that has been in place since 2003 to protect Iraqi assets that fall under American judicial jurisdiction.
But he pointed out at the same time that Iraq’s continued existence, after more than twenty years, within these exceptional arrangements sends a message that the Iraqi economy is still linked to a legal system that emerged after the war.
He added that the issue is not about the United States seizing funds, but rather about the continued need for international protection of Iraqi assets, which raises questions about the extent of Iraq’s financial sovereignty.
According to Al-Saadi, the real challenge lies in building strong financial and legal institutions that will allow Iraq to eventually emerge from this exceptional system, while maintaining legal protection for its assets abroad.
In contrast, Hussein al-Askari, an Iraqi economic analyst based in Sweden, pointed out that all the money generated from the sale of Iraqi oil goes into a bank account at the Federal Reserve in New York, and not to a bank inside Iraq.
The military official said that this account is under the supervision of the US administration and the Treasury Department, noting that the annual renewal of the state of emergency gives Washington continuity within this legal framework.
Parliamentary questions
Amid this controversy, the House of Representatives intervened, as MP Hayam Al-Yasiri directed an urgent parliamentary question to the Ministry of Oil, demanding clarification of the accuracy of the information circulating regarding a project to supply the American oil reserves with about half a million barrels per day, and the establishment of an energy and development fund in cooperation with the United States.
The MP asked whether the project had been officially approved by the Cabinet or the Ministry of Oil, whether the quantities would be within Iraq’s share in the “OPEC+” alliance or outside of it, as well as the pricing mechanism, the nature of the financial compensation, and whether the deal would be done in cash or according to a barter system in exchange for projects implemented by American companies.
She also inquired about the implementing companies, export outlets, and expected economic returns, in addition to demanding that Parliament be provided with an economic and technical feasibility study of the project within a period not exceeding fifteen days.
shafaq.com
