How US-Iran escalation will test Iraq’s balancing act

What Happened

During a White House visit on Tuesday, US President Donald Trump and Iraqi Prime Minister Ali al-Zaidi agreed to deepen economic ties, boost Iraq’s oil output, and withdraw all US forces from Iraq by September 30. Al-Zaidi also pledged that armed factions in Iraq would disarm by that date. Later that day, US Secretary of Defense Pete Hegseth warned Iraq to assert its sovereignty and disarm Iran-aligned militias, which he blamed for frequent attacks on US forces amid the US-Israel war on Iran. In response, an official of Kataib Hezbollah, Abu Mujahid al-Assaf, stated that the group would immediately join the war if Iran were attacked, citing ideological commitment. The visits also included Iraqi efforts to secure an IMF loan of up to $8bn.

Key Actors

Why It Matters

The events underscore Iraq's precarious balancing act between its US and Iran ties. Escalation between the US and Iran risks drawing Iraq into direct conflict, as Iran-aligned militias may strike from Iraqi soil, inviting US retaliation that could violate Iraqi sovereignty and destabilize an already fragile political settlement. Simultaneously, Iraq relies on US companies for oil and gas modernization, making it vulnerable to pressure from both sides.

Watch For

The September 30 deadline for US troop withdrawal and disarmament of Iran-aligned factions; whether Kataib Hezbollah or other militias act independently in a US-Iran escalation; the outcome of Iraq’s IMF loan negotiations; and any US or Israeli strikes on Iran that could trigger militia responses.