Iraq’s political chaos is a victory for Iran and a headache for the United States

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Iraq faces a summer of discontent after its most popular politician pulled his party out of parliament after failing to form a government. But even as Baghdad braces for months of unrest on the streets, the whole world should brace for the economic and security fallout.

The most likely outcome of Moqtada al-Sadr’s decision to withdraw from the political process is a return to the violent protests that rocked the country in late 2019 and early 2020. On the contrary, the upheaval to come will be even more disruptive, as the Sadr’s supporters – who withdrew from previous protests – are better organized than the leaderless cohort at the heart of these protests.

They are also angrier. Having won a majority in the general elections last fall, Sadr has been frustrated in his efforts to cobble together a governing coalition. He and his supporters will feel the political process has failed them, leaving the public square as the only stage for a show of force.

Protest, often violent, is Sadr’s business. Coming from a family of Shia clerics who paid with their lives for their opposition to Saddam Hussein, he made a name for himself in 2003 by raising a militia, known as the Mahdi Army, against the coalition led by the United States that overthrew the dictator. Sadr’s fighters were beaten, but his anti-American rhetoric never wavered. More recently, he has presented himself as a nationalist, opposed to the nefarious influence of Shiite-majority Iran in Iraqi affairs.

Although Sadr formally demobilized from the Mahdi Army in 2008 after entering electoral politics, many of his supporters remain armed, organized and dangerous. But the political groups that blocked him in parliament, including his Iran-backed Shiite rivals, have their own militias. Shiites make up 60% of Iraq’s population and the weak central government led by caretaker Prime Minister Mustafa al-Kadhimi will be loath to intervene in any internal conflict.

This is grim news for Iraqis, who are likely to see blood on their streets. But they also bode ill for the global economy: in an era of soaring oil prices, the prolonged instability of OPEC’s second-largest producer is clearly the last thing anyone needs. (Recall that the market is already short of supply from another major Arab producer wracked by political chaos: Libya.)

Buyers can only hope that Kadhimi will be able to secure Iraq’s oil infrastructure and keep supply lines open if sectarian infighting breaks out in the Shia-dominated southern provinces, which represent the majority of the country’s reserves.

President Joe Biden’s administration faces a double jeopardy. Any loss of Iraqi supply will obviously undermine efforts to cool the crude market – and lower prices at the pump in the event of a midterm election in the fall. No less important, Sadr’s withdrawal bolsters Iran at a delicate geopolitical moment when the president is simultaneously seeking to negotiate a nuclear deal with the Islamic Republic while reassuring his Arab neighbors that they have nothing to fear.

The political turmoil in Baghdad will, at least in the short term, bring butter to Tehran. According to Iraqi law, the parliamentary seats given up by Sadr went to the candidates who obtained the second highest number of votes. In most cases, these were candidates from Iranian-backed parties. This bloc, known as the Coordination Framework, is now in a strong position to form a coalition government.

This would mean the return to the post of Prime Minister of Nouri al-Maliki, whose previous two terms, from 2006 to 2014, were characterized by open license for Iran to deepen its influence in Iraqi affairs, particularly in the country’s security forces. Tehran has also backed a parallel network of Shia militias, which it has used to attack US military forces in Iraq and launch missile and drone strikes in Saudi Arabia.

Kadhimi, who is seen as a pro-Western figure, has had limited success in suppressing militias; Maliki is unlikely to even try. Instead, he will use state security forces to quell any uprisings by Sadr’s supporters.

It may be weeks or even months before a new government is formed. Non-Shia parties are no more enamored with the coordination framework than they were with the Sadr faction. But Iran is not particularly in a hurry. If, as seems increasingly likely, the nuclear negotiations fail, Tehran will be free to use Iraq to stir up trouble among the United States and its allies in the Middle East. And if the intra-Shia conflict cuts off the flow of Iraqi oil to the world market, that would be fine for Iran, as a spike in prices would provide a welcome boost to its sanctions-restricted export earnings.

For the United States, there are no good results: the political chaos in Baghdad is as bad as an Iranian proxy government.

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Bobby Ghosh is a Bloomberg Opinion columnist covering foreign affairs. Previously, he was Editor-in-Chief of the Hindustan Times, Editor-in-Chief of Noticias and International Editor of Time.

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