Friday

07-11-2025 Vol 2018

U.S.-Iran Competition Over Iraq Intensifies Amidst Restraint from Militias

Tehran’s Iraqi proxies exhibited notable restraint during the recent twelve-day conflict involving Iran, Israel, and the United States, despite the escalating U.S.-Iran competition over Iraq’s airspace and economic partnerships.

The recent escalation of military confrontation between Iran, Israel, and the United States made it clear that although Iraq declared its neutrality, its airspace was heavily utilized as a corridor for military operations. This scenario mirrored the earlier rounds of Iran-Israel strikes that occurred in 2024, which were not lost on Iran-backed militias in Iraq.

However, these groups refrained from becoming involved in the conflict. The actions of various foreign players hinted at an effort to keep Iraq insulated from the war’s ramifications.

This suggested restraint by the militias presents an opportunity for Washington to advance its strategy of diminishing Iranian influence in Iraq’s governance and energy sectors. The recent war created a significant momentum that U.S. officials should capitalize on to enhance their policy towards securing Iraq’s airspace while safeguarding American interests.

Iraqi militias, during the latest conflict, displayed a contrasting response compared to their earlier behavior in the aftermath of Hamas’s attacks on Israel. Initially, militia groups in Iran’s “axis of resistance” threatened retaliation if the U.S. intervened, but soon crossed their own boundaries, launching drone attacks on U.S. targets and Israel.

This string of retaliatory strikes led to severe U.S. counteractions against Iraqi militia leaders, which successfully deterred further attacks by March 2024. Furthermore, Israel’s warnings to Iraqi militias resulted in a noticeable drop in their aggression toward Israel.

In the current conflict, however, the militias adopted a markedly restrained approach. Notably, Kataib Hezbollah and Harakat Hezbollah al-Nujaba voiced threats of joining the conflict but only did so three days after the war commenced. This timing indicates a possible delay in orders from Tehran or a conscious decision to avoid engagement.

There are no confirmed instances of these Iraqi militias directly attacking Israel during the combat period, even though they might have facilitated sporadic drone activities from southern Syria without openly claiming involvement. Following attacks by the U.S. on Iranian targets, the militias launched only a symbolic drone strike against a U.S. facility at Erbil International Airport on June 22, and many signs pointed to their restraint.

Public demonstrations organized by militia-affiliated social media were kept away from the U.S. embassy, and a parliamentary session intended to denounce Israeli attacks failed to convene. Calls for expelling U.S. forces and diplomats were noticeably absent, with some militia members even criticizing their leaders for hesitating during the conflict.

The situation concerning Iraq’s airspace has been a persistent concern for all involved parties, particularly since the withdrawal of the majority of U.S. forces in 2011. Both the U.S. and Israel disapprove of the use of Iraqi airspace as an operational conduit for Iran to transport military assets to Syria and Lebanon. Meanwhile, Iraqi militias remain anxious about potential strikes from U.S. and Israeli aircraft, which hold the capability to target them with impunity.

Iraq theoretically possesses the means to enhance its aerial defense capabilities through a combination of U.S. and French surveillance radars alongside civilian systems. Furthermore, although Iraq holds a limited inventory of Russian Pantsir S-1 interceptor missiles and U.S.-origin F-16 aircraft, these assets were not deployed during the recent hostilities.

Despite a surge in military overflights through Iraqi airspace, there is no documented evidence of Iraqi air defenses being activated throughout the conflict period. Israeli aircraft routinely traversed Iraqi airspace while engaged in operations, dropping fuel tanks as they returned home, and many Iranian drones and missiles also crossed through Iraqi territory.

An unsettling turn of events occurred as the war drew to a close, with reports of drone attacks targeting Iraqi military radar installations, suggesting possible Israeli involvement to safeguard exits for personnel withdrawing from Iran.

The implications of this situation for U.S. policy in Iraq are significant. First, the observed caution displayed by Iranian-backed militias illustrates their hesitance to provoke U.S. or Israeli responses, a perspective that Tehran appears to endorse. Israel, adhering to various rules of engagement, has largely abstained from direct action within Iraq, save for isolated incidents of targeting Iraqi radars.

For future confrontations, the U.S. must ensure that any drone or missile attacks originating in Iraq are met with decisive action against senior militia leaders. If the U.S. fails to establish and enforce this boundary, Israel may take unilateral action, complicating the U.S.’s strategic position in Iraq.

Second, the ongoing issue of Iraqi airspace management necessitates careful deliberation. Calls for an upgrade to Iraq’s air defense systems are likely to intensify in the aftermath of the conflict. An emerging $2.8 billion agreement to acquire advanced South Korean missile systems is just one example of the escalating demands for robust air defense capabilities.

In response, the U.S. needs to formulate a clear, albeit discreet, policy concerning the status and management of Iraqi airspace. This should involve leveraging various tools, including arms sales and diplomatic engagement, to maintain a scenario wherein Iraq’s defense mechanisms do not hinder U.S. operations or objectives.

Third, the observable lack of aggression toward U.S. assets during the conflict signals a temporary diminishment of Iranian influence within Iraq, a development that should embolden U.S. engagement efforts. Although the U.S. embassy partook in a partial evacuation, it is critical to restore its core functions in Baghdad promptly.

The U.S. may be inclined to dilute its diplomatic presence in Iraq under the Trump administration, but it is essential to maintain a core mission to bolster American influence and protect personnel and economic interests.

A striking example of this influence was evident when Jassem Mohammed Abboud, the Iran-aligned head of Iraq’s Federal Supreme Court, faced forced retirement by a panel of nationalist judges—a move unthinkable prior to the conflict and possibly indicative of the shifting power dynamics.

Further opportunities exist to curtail Iranian influence within Iraq’s energy sector, demonstrated by the July 3 sanctions targeting a notable Iraqi oil smuggler linked with both Iranian and U.S.-designated terror groups.

In conclusion, while the situation remains fluid, the U.S. must leverage these developments to reinforce its position in Iraq. By strategically navigating the delicate balance of power among local and foreign actors, Washington can work toward diminishing Iran’s malign impact, fostering a more stable and cooperative relationship in Iraq moving forward.

image source from:washingtoninstitute

Charlotte Hayes