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Oil, Dollars and the Making of Iraq’s New Prime Minister
03.05.2026
By Dr Mehiyar Kathem Al Sa’edi *
Source: https://www.counterfire.org/article/oil-dollars-and-the-making-of-iraqs-new-prime-minister/
Dr Mehiyar Kathem Al Sa’edi explains how post-2003 Iraq represents a political order working exactly as its US architects and beneficiaries require. The result is a state without meaningful public accountability, institutions without real independence, elections without consequence, and sovereignty permanently exposed to external pressure
The selection of Ali al-Zaidi as Iraq’s prime minister-designate exposes the hard machinery of Iraq’s post-2003 political order. Iraq is governed not through meaningful public accountability, but through a sectarian oligarchy: a closed political class built around access to the state, oil revenues, ministries, public contracts, banks, party appointments and patronage networks.
Al-Zaidi, a businessman with interests across multiple sectors, was not elected to parliament. He has no meaningful political background. Yet he has now been placed at the centre of Iraq’s executive authority, not through a popular mandate, but through elite bargaining among the forces that have dominated the Iraqi state for more than two decades.
The question writes itself: what is the purpose of elections if Iraq’s ruling oligarchy decides, behind closed doors, who becomes prime minister?
Kurdish, Sunni and Shia elites
Elections in Iraq function less as mechanisms of accountability than as rituals through which political blocs renew their claims over the state. Voters are invited into the theatre of representation, while actual power is negotiated elsewhere: between party leaders, businessmen, foreign embassies, armed factions, religious authorities and the networks that convert public office into private accumulation. The citizen becomes useful at election time, then irrelevant during the real negotiations.
The post-2003 system has produced a political class that survives through fragmentation. Kurdish, Sunni and Shia elites claim to represent Iraqi communities, but their actual practice has been to divide the state among themselves. Every electoral cycle produces the same spectacle: horse-trading over the state itself. Kurdish, Sunni and Shia parties, each claiming to represent Iraq’s society, enter another round of bargaining over the distribution of ministries. The Ministry of Foreign Affairs may go to one Kurdish party, the Ministry of Oil to a Shia political party, and the Ministry of Culture to a Sunni party. Other ministries are divided in similar fashion. Even within ministries, posts and contracts are distributed downward through party networks.
Post-2003 Governance
Sectarian identity becomes the language of entitlement. Public office becomes the route to accumulation. Every dominant bloc expects its share of the Iraqi state. The Iraqi state has become the prize, as ministries are treated not as public institutions, but as political concessions. In this order, governing Iraq means dividing Iraq between its post-2003 elites.
This is the routine machinery of post-2003 governance: a system in which elections do not produce accountable government, but lend credibility to the redistribution of state assets among entrenched factions. What is presented as power-sharing is, in practice, a predatory arrangement dressed in the language of representation.
Al-Zaidi’s rise must therefore be read within the logic of oligarchic consolidation. His lack of electoral mandate reveals how little public mandate matters when compared to elite acceptability. The prime minister is seemingly not required to emerge from a coherent political programme or a direct relationship with voters. He must be acceptable to the brokers of the system.
Geopolitical Alignment
US and European governments have repeatedly shown that they are comfortable with this arrangement so long as it produces a government that can be described as “stable,” “balanced,” or “pragmatic.” Their concern is not accountability to Iraqi society, but geopolitical alignment, the management of oil, the containment of rival regional influence, namely Iran, and the preservation of a political order that remains negotiable to Western power.
Iraq’s Oil Wealth and the Federal Reserve
This is where the role of the United States becomes decisive. The US does not simply influence Iraq through embassies, military bases, diplomatic pressure or security agreements. It also acts through Iraq’s own money. More specifically, it acts through the financial architecture that links Iraq’s oil wealth to the Federal Reserve.
Iraq’s oil revenues are the lifeblood of the state. They fund salaries, pensions, imports, ministries, public employment and the patronage systems through which political parties maintain power. They are not merely revenue. Trump’s recent threats, and his rejection of al-Maliki and other candidates disliked by the US, were taken very seriously by Iraq’s new oligarchy.
Iraq’s oil money, routed through dollar-based financial structures and connected to the Federal Reserve Bank of New York, has long given the United States a powerful point of leverage. This arrangement is often treated as technical, administrative or financial. It is none of these things in any neutral sense. It is a mechanism of imperial power.
The United States can act through the dollar and through threats to restrict, delay or condition the movement of funds to shape Iraq’s politics. It can signal that Iraq’s access to its own oil money depends on political behaviour acceptable to Washington, particularly with a view to shaping Iraq’s relationship with Iran.
That threat is taken seriously in Iraq because everyone understands what is at stake. Iraq is an oil-dependent state with a vast public payroll and a political class whose survival depends on the continued distribution of money. A disruption to dollar flows is a weapon pointed at the centre of the state. It can disrupt imports and expose the fragility of the entire political economy.
A Layered System of Domination
Iraq’s ruling factions shape the state from within, while the United States shapes the boundaries from without. The result is a layered system of domination: sectarian oligarchy at home, imperial financial leverage from abroad.
The United States helped create the conditions for this order after 2003. It dismantled Iraq’s existing state structures, sponsored new political arrangements, empowered exile parties, institutionalised sectarian bargaining and embedded Iraq within a US-dominated financial and security architecture. Iraqi political elites then adapted to that system, expanded it, profited from it and made it their own.
Today, Iraq represents a political order working exactly as its US architects and beneficiaries require. But Iraqi society pays the price. The result is a state without meaningful public accountability, institutions without real independence, elections without consequence, and sovereignty permanently exposed to external pressure.
Al-Zaidi’s nomination is about the system that made his elevation possible. It is about a political class that treats the state as property and foreign powers that prefer managed stability to any semblance of democratic or accountable government. It is about the Federal Reserve, and by extension the US banking system, as a quiet instrument of empire, disciplining Iraq through the financial routes of its own oil wealth.
*Dr Mehiyar Kathem Al Sa’edi is an Honorary Senior Research Fellow at University College London
03.05.2026
By Dr Mehiyar Kathem Al Sa’edi *
Source: https://www.counterfire.org/article/oil-
Dr Mehiyar Kathem Al Sa’edi explains how post-
Al-
The question writes itself: what is the purpose of elections if Iraq’s ruling oligarchy decides, behind closed doors, who becomes prime minister?
Kurdish, Sunni and Shia elites
Elections in Iraq function less as mechanisms of accountability than as rituals through which political blocs renew their claims over the state. Voters are invited into the theatre of representation, while actual power is negotiated elsewhere: between party leaders, businessmen, foreign embassies, armed factions, religious authorities and the networks that convert public office into private accumulation. The citizen becomes useful at election time, then irrelevant during the real negotiations.
The post-
Post-
This is the routine machinery of post-
Al-
Geopolitical Alignment
US and European governments have repeatedly shown that they are comfortable with this arrangement so long as it produces a government that can be described as “stable,” “balanced,” or “pragmatic.” Their concern is not accountability to Iraqi society, but geopolitical alignment, the management of oil, the containment of rival regional influence, namely Iran, and the preservation of a political order that remains negotiable to Western power.
Iraq’s Oil Wealth and the Federal Reserve
This is where the role of the United States becomes decisive. The US does not simply influence Iraq through embassies, military bases, diplomatic pressure or security agreements. It also acts through Iraq’s own money. More specifically, it acts through the financial architecture that links Iraq’s oil wealth to the Federal Reserve.
Iraq’s oil revenues are the lifeblood of the state. They fund salaries, pensions, imports, ministries, public employment and the patronage systems through which political parties maintain power. They are not merely revenue. Trump’s recent threats, and his rejection of al-
Iraq’s oil money, routed through dollar-
The United States can act through the dollar and through threats to restrict, delay or condition the movement of funds to shape Iraq’s politics. It can signal that Iraq’s access to its own oil money depends on political behaviour acceptable to Washington, particularly with a view to shaping Iraq’s relationship with Iran.
That threat is taken seriously in Iraq because everyone understands what is at stake. Iraq is an oil-
A Layered System of Domination
Iraq’s ruling factions shape the state from within, while the United States shapes the boundaries from without. The result is a layered system of domination: sectarian oligarchy at home, imperial financial leverage from abroad.
The United States helped create the conditions for this order after 2003. It dismantled Iraq’s existing state structures, sponsored new political arrangements, empowered exile parties, institutionalised sectarian bargaining and embedded Iraq within a US-
Today, Iraq represents a political order working exactly as its US architects and beneficiaries require. But Iraqi society pays the price. The result is a state without meaningful public accountability, institutions without real independence, elections without consequence, and sovereignty permanently exposed to external pressure.
Al-
*Dr Mehiyar Kathem Al Sa’edi is an Honorary Senior Research Fellow at University College London