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After the Iran war: A turning point for Iraq's political order?
From domestic power bargaining to the fragile balancing act with Iran and the US, Iraq will face a set of relationships fundamentally altered by the war
01.04.2026
By Hayder Al-Shakeri*
Source:https://www.newarab.com/analysis/after-iran-war-turning-point-iraqs-political-order
On 24 March 2026, Iraq’s Ministerial Council for National Security authorised the Popular Mobilisation Forces (PMF) and other security agencies to act under the principle of self-defence and the right to respond, following US airstrikes in Anbar that killed and injured more than a dozen PMF and Iraqi army personnel.
Two days later, Iraqi and US officials met at the newly established High Joint Coordination Committee and reaffirmed their security partnership, committing to preventing Iraqi territory from being used as a launch point for attacks.
Yet the following day, attacks continued, including on PMF positions, the Kurdistan Region, and a drone that fell near residential areas in Baghdad.
Taken together, these developments reflect a position that Baghdad has attempted to sustain for two decades: maintain working relationships with Washington and Tehran simultaneously, avoid being drawn into either side’s conflicts, and manage the contradictions as they arise.
For much of that period, this approach was sustainable. The regional environment was permissive enough, oil revenues softened the effects of weak governance, and neither the United States nor Iran pushed hard enough at the same time to force a choice.
The current war on Iran has changed those conditions. Iraq now finds itself authorising armed actors with ties to Tehran to retaliate while reaffirming its security commitments to Washington, not as a strategic doctrine but as a reflection of how limited Baghdad’s control over either relationship has become.
A fragile balancing act
That loss of control was not produced by this war. It was built into the post-2003 order that the United States and Iraq’s political class helped construct. The ‘muhasasa’ system rewarded parties for capturing institutions and distributing their resources, rather than for building a coherent state.
The roots of that order were visible from the start: after 2003, the Iraqi army was dissolved and the wider security apparatus was reconstituted in ways that opened the door to factional capture, including the incorporation of Badr figures and fighters into the Interior Ministry, police, and associated military formations.
After the campaign against the Islamic State (IS), the same logic deepened as thousands of members of Iran-aligned armed groups were absorbed into formal security structures and placed on the state payroll without any corresponding transfer of operational loyalty to Baghdad.
Oil revenues, meanwhile, sustained a public sector that functioned less as an engine of service delivery than as a system for distributing patronage across the factions brought into government.
This same order has also shaped Iraq’s external relationships, most notably with Iran. Iraq’s relationship with Iran will not be severed by this conflict, but its terms may shift in ways that remain unclear.
Mojtaba Khamenei was installed as Iran’s new supreme leader in March 2026 with decisive backing from the Islamic Revolutionary Guard Corps (IRGC), and the direction of the new leadership remains uncertain.
Whether Tehran prioritises rebuilding regional influence through the networks it cultivated over the past two decades, or turns inward toward consolidation and recovery, will shape Baghdad’s room for manoeuvre.
Iraq’s Shia political forces have largely adopted a wait-and-see posture, monitoring shifts in the regional balance of power while showing limited capacity to shape them. That may be politically understandable in the short term, but it is not a strategy.
The government that eventually forms in Baghdad will need to define what a relationship with a weakened but still influential Iran looks like on Iraqi terms, rather than waiting again for Tehran to set those parameters.
A fragmented armed landscape
The conduct of Iran-aligned armed groups during the conflict has revived two familiar readings, both of which should be treated with caution.
The first is that these groups operate as unified instruments of Iranian policy that activate on command. The second is that their economic and political integration within Iraq has diluted their external loyalties to the point where they can be managed through inclusion. Neither holds cleanly.
The twelve-day war in June 2025 appeared to support the second reading. Iran-aligned groups remained largely restrained, reflecting a convergence of material interests: these groups had accumulated significant economic stakes inside Iraq, while Tehran had strong incentives to protect financial flows running through Iraqi channels.
The current US-Israeli war on Iran has crossed a different threshold. Within days, the Islamic Resistance in Iraq expanded its operations, targeting the US embassy, Baghdad International Airport, airports in the Kurdistan Region, and oil and gas sites. The threshold had not disappeared in 2025; it had simply not yet been crossed.
At the same time, the conflict has underscored that the Iran-aligned camp is not a unified actor. Some factions have signalled openness to fuller integration into state structures. Others have moved in the opposite direction, expanding attacks across federal Iraq and the Kurdistan Region.
In several cases, responsibility was claimed by entities with no clear chain of command and no formal PMF affiliation, raising serious questions about how far the armed landscape has fragmented beyond the control of any single authority.
There is a growing argument that the conflict has opened a window that no previous Iraqi government had. Iran’s regional position has weakened, segments of aligned networks have come under direct pressure, and some factions appear more open than before to negotiated integration. But this framing places the constraint on the wrong side of the equation.
The central problem has never been only the strength of these groups. It has been the political order that accommodates them. Mustafa al-Kadhimi’s attempt in 2021 to pursue a more disaggregated approach demonstrated the limits clearly: a weaker Iran may reduce one source of pressure, but it does not in itself produce an Iraqi state capable of imposing a different system.
This is why the question of weapons has increasingly become a crisis within the Shia elite political arena itself. The issue is no longer only whether the state can control armed groups, but whether Shia political actors can contain forces that operate in their name while pulling the country toward escalation on a timeline the political class does not control.
The war has made this reckoning harder to postpone. Whether it produces meaningful integration rather than another round of nominal accommodation depends on something Iraq has consistently lacked since 2003: political will to prioritise state authority over factional advantage.
A paralysed government inside a dependent state
The war unfolded just as Iraqi elites were attempting to form a new government following the November 2025 elections, leaving Prime Minister Mohammed Shia al-Sudani in a caretaker role with limited authority.
The overlap between political paralysis at the top and active conflict on Iraqi territory is not coincidental. It reflects a system in which government formation is structurally slow because it is not primarily about programme or policy, but about negotiating the distribution of ministries, budgets, and institutional access among competing factions.
This dynamic was visible when Donald Trump warned against Nouri al-Maliki’s return to office. The Coordination Framework responded by insisting that the choice of prime minister was an exclusively Iraqi constitutional matter. The sovereignty framing was predictable: any actor seen to yield openly to external pressure is weakened immediately within Iraq’s coalition politics. But the deeper issue is not the personnel dispute itself.
Government formation in Iraq has never been a technocratic exercise. It is a bargaining process over access to the state, and any government that emerges from it is likely to be structured for coalition management rather than for the strategic decisions the current moment demands.
Those decisions are more consequential than in any previous cycle because of where Iraq’s vulnerabilities now sit. Washington retains significant financial leverage through oversight mechanisms tied to Iraq’s oil revenues and dollar access. Iraq’s dependence on Iranian gas for electricity generation remains unresolved despite repeated commitments to reduce it.
The Strait of Hormuz continues to serve as the primary outlet for Iraqi oil exports, leaving the country exposed to regional disruption. The current conflict has not created these vulnerabilities; it has activated them simultaneously. A caretaker government preoccupied with coalition arithmetic is poorly positioned to address them.
The US-Iraq transition framework further complicates this picture. While the coalition mission in federal Iraq was set to end by September 2025, Syria-related operations were to continue from Iraqi territory through September 2026. Even as the US military footprint decreases, Washington’s financial leverage remains intact.
The next Iraqi government will therefore face a difficult task: reducing structural dependence on the United States without triggering punitive pressure. No government since 2003 has managed that successfully.
A regional relationship reset
The Arab League summit in Baghdad in May 2025 was intended to signal Iraq’s return as a credible regional actor. Less than a year later, that claim is under strain.
The Khor Abdullah dispute illustrates why. Iraq’s Federal Supreme Court annulled the 2012 navigation agreement with Kuwait, and Baghdad’s subsequent submission of updated maritime coordinates to the United Nations triggered a coordinated backlash from several Gulf states. The episode reinforced concerns that Iraqi foreign policy remains vulnerable to factional manoeuvring beyond the central government’s control.
The current conflict has amplified those concerns. Iraqi territory has been used as a launch platform, diplomatic sites have been exposed to risk, airports in the Kurdistan Region have been targeted, and attacks have reached near civilian areas in Baghdad.
Diplomatic sites have been exposed to risk. Regional capitals are now asking a more fundamental question: not only whether Iraq is a viable partner, but whether it can provide the minimum assurances required of a functioning state.
If engagement continues, it is likely to do so on more conditional terms. Symbolic diplomacy will no longer suffice. Regional partners will look for evidence that Baghdad can exercise authority over both the armed and political landscape. That is a standard no Iraqi government has yet consistently met.
The way forward
The conflict has made visible, with unusual clarity, what successive Iraqi governments have recognised but deferred. Iraq’s airspace has been traversed by multiple actors, exposing a sovereignty deficit that extends beyond rhetoric. Its electricity system has faltered under pressure on Iranian energy supplies. Oil export revenues have been threatened by instability in Hormuz. Dollar access remains tied to US oversight.
Across all of this, the Iraqi state has spoken in multiple voices: the National Security Council, the foreign ministry, armed factions, and the Kurdistan Region have each navigated the conflict on different terms. These are not new problems. They are longstanding structural weaknesses, now carrying higher costs.
The government that eventually forms in Baghdad will face a set of relationships fundamentally altered by the conflict. Iran is weakened but remains influential. The United States may reduce its military role, but it retains leverage that remains central to Iraq’s economy.
Gulf states remain open to engagement, but on more cautious terms. Each of these relationships requires active management from a government forming slowly, within a system designed more for elite bargaining than strategic governance.
The war has not created Iraq’s core problems. It has removed the space for postponing them. Whether the next government begins to address these structural weaknesses or continues to manage the same order under greater pressure will define Iraq’s post-war trajectory.
On the evidence of the past two decades, the burden of proof remains with those expecting a different outcome.
*Hayder Al-Shakeri is a research fellow with the Middle East and North Africa programme at Chatham House
From domestic power bargaining to the fragile balancing act with Iran and the US, Iraq will face a set of relationships fundamentally altered by the war
01.04.2026
By Hayder Al-
On 24 March 2026, Iraq’s Ministerial Council for National Security authorised the Popular Mobilisation Forces (PMF) and other security agencies to act under the principle of self-
Two days later, Iraqi and US officials met at the newly established High Joint Coordination Committee and reaffirmed their security partnership, committing to preventing Iraqi territory from being used as a launch point for attacks.
Yet the following day, attacks continued, including on PMF positions, the Kurdistan Region, and a drone that fell near residential areas in Baghdad.
Taken together, these developments reflect a position that Baghdad has attempted to sustain for two decades: maintain working relationships with Washington and Tehran simultaneously, avoid being drawn into either side’s conflicts, and manage the contradictions as they arise.
For much of that period, this approach was sustainable. The regional environment was permissive enough, oil revenues softened the effects of weak governance, and neither the United States nor Iran pushed hard enough at the same time to force a choice.
The current war on Iran has changed those conditions. Iraq now finds itself authorising armed actors with ties to Tehran to retaliate while reaffirming its security commitments to Washington, not as a strategic doctrine but as a reflection of how limited Baghdad’s control over either relationship has become.
A fragile balancing act
That loss of control was not produced by this war. It was built into the post-
The roots of that order were visible from the start: after 2003, the Iraqi army was dissolved and the wider security apparatus was reconstituted in ways that opened the door to factional capture, including the incorporation of Badr figures and fighters into the Interior Ministry, police, and associated military formations.
After the campaign against the Islamic State (IS), the same logic deepened as thousands of members of Iran-
Oil revenues, meanwhile, sustained a public sector that functioned less as an engine of service delivery than as a system for distributing patronage across the factions brought into government.
This same order has also shaped Iraq’s external relationships, most notably with Iran. Iraq’s relationship with Iran will not be severed by this conflict, but its terms may shift in ways that remain unclear.
Mojtaba Khamenei was installed as Iran’s new supreme leader in March 2026 with decisive backing from the Islamic Revolutionary Guard Corps (IRGC), and the direction of the new leadership remains uncertain.
Whether Tehran prioritises rebuilding regional influence through the networks it cultivated over the past two decades, or turns inward toward consolidation and recovery, will shape Baghdad’s room for manoeuvre.
Iraq’s Shia political forces have largely adopted a wait-
The government that eventually forms in Baghdad will need to define what a relationship with a weakened but still influential Iran looks like on Iraqi terms, rather than waiting again for Tehran to set those parameters.
A fragmented armed landscape
The conduct of Iran-
The first is that these groups operate as unified instruments of Iranian policy that activate on command. The second is that their economic and political integration within Iraq has diluted their external loyalties to the point where they can be managed through inclusion. Neither holds cleanly.
The twelve-
The current US-
At the same time, the conflict has underscored that the Iran-
In several cases, responsibility was claimed by entities with no clear chain of command and no formal PMF affiliation, raising serious questions about how far the armed landscape has fragmented beyond the control of any single authority.
There is a growing argument that the conflict has opened a window that no previous Iraqi government had. Iran’s regional position has weakened, segments of aligned networks have come under direct pressure, and some factions appear more open than before to negotiated integration. But this framing places the constraint on the wrong side of the equation.
The central problem has never been only the strength of these groups. It has been the political order that accommodates them. Mustafa al-
This is why the question of weapons has increasingly become a crisis within the Shia elite political arena itself. The issue is no longer only whether the state can control armed groups, but whether Shia political actors can contain forces that operate in their name while pulling the country toward escalation on a timeline the political class does not control.
The war has made this reckoning harder to postpone. Whether it produces meaningful integration rather than another round of nominal accommodation depends on something Iraq has consistently lacked since 2003: political will to prioritise state authority over factional advantage.
A paralysed government inside a dependent state
The war unfolded just as Iraqi elites were attempting to form a new government following the November 2025 elections, leaving Prime Minister Mohammed Shia al-
The overlap between political paralysis at the top and active conflict on Iraqi territory is not coincidental. It reflects a system in which government formation is structurally slow because it is not primarily about programme or policy, but about negotiating the distribution of ministries, budgets, and institutional access among competing factions.
This dynamic was visible when Donald Trump warned against Nouri al-
Government formation in Iraq has never been a technocratic exercise. It is a bargaining process over access to the state, and any government that emerges from it is likely to be structured for coalition management rather than for the strategic decisions the current moment demands.
Those decisions are more consequential than in any previous cycle because of where Iraq’s vulnerabilities now sit. Washington retains significant financial leverage through oversight mechanisms tied to Iraq’s oil revenues and dollar access. Iraq’s dependence on Iranian gas for electricity generation remains unresolved despite repeated commitments to reduce it.
The Strait of Hormuz continues to serve as the primary outlet for Iraqi oil exports, leaving the country exposed to regional disruption. The current conflict has not created these vulnerabilities; it has activated them simultaneously. A caretaker government preoccupied with coalition arithmetic is poorly positioned to address them.
The US-
The next Iraqi government will therefore face a difficult task: reducing structural dependence on the United States without triggering punitive pressure. No government since 2003 has managed that successfully.
A regional relationship reset
The Arab League summit in Baghdad in May 2025 was intended to signal Iraq’s return as a credible regional actor. Less than a year later, that claim is under strain.
The Khor Abdullah dispute illustrates why. Iraq’s Federal Supreme Court annulled the 2012 navigation agreement with Kuwait, and Baghdad’s subsequent submission of updated maritime coordinates to the United Nations triggered a coordinated backlash from several Gulf states. The episode reinforced concerns that Iraqi foreign policy remains vulnerable to factional manoeuvring beyond the central government’s control.
The current conflict has amplified those concerns. Iraqi territory has been used as a launch platform, diplomatic sites have been exposed to risk, airports in the Kurdistan Region have been targeted, and attacks have reached near civilian areas in Baghdad.
Diplomatic sites have been exposed to risk. Regional capitals are now asking a more fundamental question: not only whether Iraq is a viable partner, but whether it can provide the minimum assurances required of a functioning state.
If engagement continues, it is likely to do so on more conditional terms. Symbolic diplomacy will no longer suffice. Regional partners will look for evidence that Baghdad can exercise authority over both the armed and political landscape. That is a standard no Iraqi government has yet consistently met.
The way forward
The conflict has made visible, with unusual clarity, what successive Iraqi governments have recognised but deferred. Iraq’s airspace has been traversed by multiple actors, exposing a sovereignty deficit that extends beyond rhetoric. Its electricity system has faltered under pressure on Iranian energy supplies. Oil export revenues have been threatened by instability in Hormuz. Dollar access remains tied to US oversight.
Across all of this, the Iraqi state has spoken in multiple voices: the National Security Council, the foreign ministry, armed factions, and the Kurdistan Region have each navigated the conflict on different terms. These are not new problems. They are longstanding structural weaknesses, now carrying higher costs.
The government that eventually forms in Baghdad will face a set of relationships fundamentally altered by the conflict. Iran is weakened but remains influential. The United States may reduce its military role, but it retains leverage that remains central to Iraq’s economy.
Gulf states remain open to engagement, but on more cautious terms. Each of these relationships requires active management from a government forming slowly, within a system designed more for elite bargaining than strategic governance.
The war has not created Iraq’s core problems. It has removed the space for postponing them. Whether the next government begins to address these structural weaknesses or continues to manage the same order under greater pressure will define Iraq’s post-
On the evidence of the past two decades, the burden of proof remains with those expecting a different outcome.
*Hayder Al-