Iraq’s premiership crisis

Baghdad has entered a complex and finely balanced phase, in which constitutional deadlines collide with competing agendas, and the old arguments over “sovereignty” and the nature of the state have returned to the centre of Iraqi political life. The present crisis -focused on who will become the next prime minister- is not a passing electoral squabble. It is, more bluntly, a direct reflection of the struggle between Washington and Tehran.

On 27 January 2026, US President Donald Trump dealt a heavy blow to efforts to nominate former prime minister Nouri al-Maliki to form Iraq’s next government. He dismissed Maliki as “a very bad choice”, warning that his return would mean a complete cut-off of American assistance to Baghdad. Washington -placing Iraq at the heart of its “maximum pressure” strategy against Iran- views Maliki as aligned with Iran’s Islamic Revolutionary Guard Corps, and as a politician whose past policies helped create the conditions that enabled ISIS’s rise in 2014.

That American position has been conveyed formally to the Iraqi government and to leaders of the Coordination Framework through multiple channels. The latest was Baghdad’s announcement that the foreign ministry had received a verbal message from the US side warning of sanctions on individuals and institutions if Maliki’s nomination is pursued.

The message from Washington has been consistent: choosing a prime minister is an Iraqi sovereign decision, but the United States will make corresponding sovereign decisions about how it deals with the next government, depending on its political identity and the extent of its proximity to Tehran.

Against this backdrop, the Iraqi researcher and writer Laith Natiq argues that the “American veto” is not, in itself, new. The United States -and regional actors, foremost Iran- have long sought to influence Iraq’s internal affairs to secure their interests. What is new, he says, is the bluntness of this intervention: few states have presented their objections so openly in another country’s domestic politics. That, in turn, has exposed what he describes as the political class’s confusion in handling Washington’s stance, and its weakness in the face of external pressure.

Ihsan al-Shammari, professor of strategic and international studies at the University of Baghdad, frames the moment differently. Iraq’s system, he argues, previously relied on a kind of “convergence of opposites” between America and Iran. Trump, in his view, has torn up that unwritten arrangement and moved to pull Iraq out from under Iran’s umbrella, ending the ruling class’s ability to manoeuvre in what Shammari calls the “grey zone”.

The result has been acute disarray within the Coordination Framework. While Maliki has insisted he will remain in the race and denounced what he calls “brazen interference”, figures within the framework -including Ammar al-Hakim, Haider al-Abadi, and Qais al-Khazali- have begun looking for alternatives to avoid a potentially suicidal confrontation with the Trump administration. Meanwhile, Taqaddum - one of the most prominent parties representing the Sunni component - has reiterated that its early reservations about Maliki predated the American position.

Fault-lines within the Shia camp

The disagreement inside the Coordination Framework has already derailed a meeting intended to address the issue. Iraqi sources say Maliki’s insistence forced leaders to postpone the gathering “until further notice”, exposing deeper cracks within the ruling Shia alliance. The same sources say Maliki refused to attend after learning that discussions were likely to focus on pressuring him to withdraw his candidacy.

Washington did not wait long to translate its warnings into economic reality. In February 2026, the US Treasury imposed sanctions on five Iraqi banks -Misk, al-Sanam, al-Muttahid, al-Ameen, and al-Mashriq- accusing them of involvement in money-laundering networks and dollar smuggling on behalf of the IRGC and the Quds Force. The move raised the number of Iraqi banks sanctioned by the United States to 34 out of 44.

Shammari warns that weaponising finance carries serious risks. Any expansion of sanctions to include the Central Bank of Iraq or the State Oil Marketing Organisation (SOMO), he argues, would trigger a comprehensive economic collapse and social unrest, given Iraq’s structural dependence on the dollar.

Natiq agrees, noting that while the Iraqi government has tried to comply with sanctions, Washington retains the greatest leverage over the pipeline through which oil revenues flow. The harshest consequences, he cautions, would be felt not in political salons but in the daily lives of ordinary Iraqis.

Central Bank of Iraq

Where does Sudani fit?

Before Trump’s rejection of Maliki, Prime Minister Mohammed Shia al-Sudani, leader of the largest parliamentary bloc, announced that he would withdraw from the contest for a second term. He effectively left the nomination to Maliki, arguing that the “Shia Coordination Framework” had selected him to lead the next phase.

Yet leaks have portrayed Sudani’s withdrawal as a tactical manoeuvre. He understands, the argument goes, that pressing ahead in the current climate of American escalation could turn him into the fall guy for looming political and economic crises, chief among them Washington’s tightening posture towards Tehran’s regional allies.

Sudani’s concession to Maliki, according to these accounts, came after three rounds of direct talks aimed at maintaining the framework and preventing an open split within the Shia house. But the concession was not cost-free: the same leaks suggest Sudani is betting Maliki will be unable to clear the obstacles ahead, allowing Sudani to return later as the sole compromise candidate, acceptable to Washington, Najaf, and even Tehran.

Three pathways under discussion

With US pressure rising amid broader regional tensions, the latest leaks from the Green Zone and the Coordination Framework’s closed-door meetings suggest three broad pathways are now under examination.

The first is an “orderly withdrawal” by Maliki under the weight of American threats, reinforced by Muqtada al-Sadr’s opposition to his candidacy. In this scenario, Maliki could step back in return for political guarantees: preserving his coalition as a major player in government and securing sovereign portfolios for his camp. Names such as Haider al-Abadi and Qasim al-Araji are floated as internationally acceptable “compromise” candidates.

The second is Maliki’s continued insistence on running and on forming a majority government within the framework, backed by armed factions and Tehran. This course would almost certainly bring a direct clash with the Trump administration and could end in sanctions against the Iraqi state itself, potentially even the freezing of oil accounts. But it grows harder as more allies distance themselves from Maliki’s bid.

The third, seen by many as the most likely, is a return to Sudani. His earlier withdrawal and deference to Maliki are viewed here as a manoeuvre intended to demonstrate that Maliki is, in practice, an impossible option. Once Maliki fails to secure a consensus, Sudani could re-emerge as the “candidate of necessity” to avert financial breakdown, though on new terms that would curb the influence of factions that have antagonised Washington.

A test-or a dead end?

Iraq, it seems, faces an exceptionally difficult test. A political approach built on personalising power and privileging cross-border loyalties has reached a dead end under intense American pressure, alongside internal pressures-some popular, others driven by rival political forces in which the Sadrist current has reasserted itself. Trump’s explicit “veto” of certain names underlines that Washington is no longer content with “managing the crisis”. It is, instead, moving towards “engineering outcomes”.

Natiq points to the political class’s disorientation as it waits for a route out, whether via Maliki’s withdrawal, Sudani’s return as a rescuer, or the emergence of a third figure who can satisfy all sides.

Shammari, for his part, discounts the prospect of a confrontation government led by Maliki, and downplays Sudani’s chances in light of Washington’s previous assessment of him. He suggests the Coordination Framework may be compelled to present an independent compromise candidate, one acceptable to the United States and capable of striking a workable understanding with the administration.

Washington, meanwhile, has succeeded in building a substantial barrier between Iraq’s financial system and Iran’s; hard currency can no longer be channelled to Tehran, and imports have fallen sharply. Yet Natiq argues that the United States is pursuing an additional aim through this pressure: keeping Iraqi institutions effectively hostage to American leverage and ensuring greater, more immediate influence over Iraq’s trajectory.

As for the Iran-aligned armed factions, Shammari notes that the issue may form part of wider discussions, but it remains unlikely that Washington would allow Tehran to use Iraq as a bargaining chip at the negotiating table.

Iraqi officials are increasingly anxious about American pressure in what has become a currency war, even as political forces may soon be compelled to sit down and produce a “political technocrat” government capable of riding out Trump’s storm, at a time when Washington is seeking to separate the Iraqi file from its broader negotiations with Iran.