Why does the US control Iraq's oil revenues?

After the 2003 US-led invasion of Iraq, a financial system was established in New York to manage the country's oil revenues. This arrangement, initially intended to protect Iraqi assets from international creditors and fund reconstruction, has given the US significant control over Iraq's access to its own funds. Today, the system, overseen by an International Advisory and Monitoring Board, results in the US freezing or delaying shipments of Iraq's foreign currency, as seen in a recent incident where Washington held back $500 million.

Muayen al-Kadhimi, a former parliamentary Finance Committee member, criticized this move, stating that it violates Iraq's financial and political sovereignty. The system, which began under UN Security Council Resolution 1483, was also designed to safeguard Iraqi assets from creditors seeking claims against Saddam Hussein's regime.

Despite the formal UN-backed system ending in 2011, Iraq's oil revenues still pass through a New York-based account, keeping the country dependent on the US financial system. While some experts suggest that Iraq could move its funds to multiple sovereign accounts outside the US, most believe such a move would still leave the country vulnerable to US pressure due to the global reliance on the US dollar for international trade.