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Iraq Wants to Ditch the U.S. Dollar in Oil Trade

  • The Iraqi Finance Committee opposes US sanctions on Iraqi banks, citing money laundering as a pretext.
  • US Treasury officials expect Iraq's cooperation in identifying and disrupting funds of Iran-backed factions.
  • Iraq's push for de-dollarization includes diversifying cash reserves and reducing reliance on the US dollar in economic transactions.

Via The Cradle

The Finance Committee in the Iraqi parliament made a statement on Wednesday calling for the sale of oil in currencies other than the US dollar, aiming to counter US sanctions on the Iraqi banking system

"The US Treasury still uses the pretext of money laundering to impose sanctions on Iraqi banks. This requires a national stance to put an end to these arbitrary decisions," the statement said. "Imposing sanctions on Iraqi banks undermines and obstructs Central Bank efforts to stabilize the dollar exchange rate and reduce the selling gap between official and parallel rates," it added.

The Finance Committee affirmed its "rejection of these practices, due to their repercussions on the livelihoods of citizens," and reiterated its "call on the government and the Central Bank of Iraq to take quick measures against the dominance of the dollar, by diversifying cash reserves from foreign currencies."

Washington imposed sanctions on Iraqi Al-Huda Bank this week, under claims of laundering money for Iran. Several other banks have been hit with similar sanctions over the past year.

The statement came the same day a senior US Treasury official said Washington expects Baghdad to help identify and disrupt the funds of Iran-backed resistance factions in Iraq.

"These are, as a whole, groups that are actively using and abusing Iraq and its financial systems and structure in order to perpetuate these acts and we have to address that directly. Frankly, I think it is clearly our expectation from Treasury perspective that there is more we can do together to share information and identify exactly how these militias groups are operating here in Iraq," the official stated. 

Three US soldiers were killed in an Iraqi resistance attack near the Syrian–Jordanian border on January 28. Near daily Iraqi attacks on US bases in Iraq and Syria have now been halted after the killing of the US soldiers, following Iraqi government pressure on resistance groups, primarily the Kataib Hezbollah faction.

The government in Baghdad has faced pushback from Washington for its attempts to diplomatically facilitate a withdrawal of US troops from Iraq, and a transition of US presence in Iraq to an "advisory role." 

The US exercises significant control over the Iraqi financial system. Due to US sanctions, Baghdad has struggled to pay hefty energy debts owed to Iran. Additionally, Iraqi oil revenues are transferred to the Federal Reserve Bank of New York. Baghdad requires US permission to access these funds.

The Iraqi government recently expressed hope in moving towards de-dollarization

Iraq is set to implement several new economic measures to further strengthen the national currency against the US dollar, a government source told the Iraqi News Agency (INA) on 14 November. Last May, the Iraqi government announced a ban on the US dollar for both personal and business transactions. 

“It is clear that Iraq is economically dominated by the US, and our government does not truly control or have access to its own money … We believe that it is crucial to move away from the hegemony of the dollar, especially as it has become a tool to impose sanctions on countries. It is time for Iraq to rely on its local currency,” Iraqi MP and member of the Finance Committee, Hussein Mouanes, told The Cradle in an exclusive interview last year. 

By Zerohedge.com 

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  • Mamdouh Salameh on February 03 2024 said:
    The US dollar has become synonymous with US punitive sanctions against countries which don't toe the US political line, American hegemony and political oppression. That is why the global de-dollarization drive is gaining a great momentum among the majority of countries of the world including Iraq.

    Moreover, the global banking system is reducing its dollar assets and buying more gold because of a devaluating dollar against other major currencies, rising American national debts and continued printing of dollars for deficit financing. That is why the dollar has become a fiat currency.

    Furthermore, the BRICS countries (Brazil, Russia, India, China and South Africa) which currently account for 47% of global GDP are working diligently to replace the current unipolar World Order led by by the United States with a fairer and more equitable multipolar one and also create a new financial system away from the dollar.

    By 2030 the yuan could emerge as the principal global reserve currency with the petro-yuan becoming the global oil currency.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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