U.S. Suspends $500 Million Cash Shipment and Halts Military Aid to Iraq

U.S. U.S. officials cited by @zerohedge. This action escalates pressure on Baghdad to address powerful Iranian-backed militias. U.S. banknotes was recently blocked by Treasury Department officials. The blocked shipment consisted of proceeds from Iraqi oil sales held in Federal Reserve Bank of New York accounts.

U.S. and Iraqi officials told @zerohedge. U.S. halted $13 billion in annual cash shipments to Iraq, marking the second such suspension since the war on Iran began, as reported by Al Mayadeen English on April 22, 2026.

During the height of the March fighting between Iran and Israel, several American facilities across Iraq came under attack. U.S. Embassy in Baghdad's Green Zone was targeted in these incidents. Attacks typically involved drones or rocket fire, with Erbil and northern Iraq facing heavy fire.

U.S. dollars are flown into Baghdad in pallets of hard cash, determining Iraq's ability to pay for basic needs such as salaries, food, and medicine. U.S. Treasury since 2003, which approves or denies them based on its own criteria.

The Coordination Framework, the largest Iran-aligned parliamentary bloc of Shia parties in Iraq, is racing to pick a new prime minister for the country. Neither of the two main candidates for Iraq's new prime minister are acceptable to Washington.

U.S. actions amid ongoing regional tensions. U.S. officials. The suspensions come as Iraq navigates its ties with Iran, a major trading partner and source of natural gas for electricity production. U.S. regional goals, including enforcing economic sanctions on Iran, these fund transfers can be delayed or reduced.