The attacks launched by the United States and Israel on Iran on Feb. 28, 2026, have directly affected Iraq, one of the countries most quickly feeling the impact of regional tensions. The main factor that will determine the nature of Iraq’s experience is the scope of the intervention against Iran. While that scope remains unclear, Iraq is already facing a multi-layered strain that spans security, politics, and the economy. Even though the U.S.-Israeli attacks have not directly drawn Iraq into the conflict, they are leaving the country increasingly vulnerable. Within this vulnerability, issues related to the security sector, political structure, and economic matters are coming to the forefront.
Security sector
On a concrete level, two critical points in Iraq have emerged as being affected by the attacks: the Jurf al-Sakhar subdistrict (officially Jurf al-Nasr) of al-Musayab district in Babil governorate, and the Harir Air Base in Erbil province. In the attack on Jurf al-Sakhar, elements of the Popular Mobilization Forces (PMF), also known as Hashd al-Shaabi linked to the militia group Kataib Hezbollah were targeted, resulting in casualties. The incident highlighted that Iraqi territory has entered the direct sphere of the regional tension.
In this context, the targeting of Jurf al-Sakhar can be seen not only as a tactical military operation but also as a deterrent message aimed at Iran-aligned armed groups in Iraq. The area has long been regarded as strategic due to its militia networks, logistics routes, and armed mobilization capacity. Meanwhile, the attack on Harir Air Base in Erbil, which hosts U.S. military personnel, demonstrates that the message was not left unanswered. As a result, Iraq has become a space for reciprocal retaliation and symbolic displays of force, even if it has not turned into a direct front-line conflict. Harir’s proximity, just 60 kilometers from the Iranian border, adds both symbolic and strategic weight to the attack. On March 1, 2026, a convoy belonging to the militia group Asaib Ahl al-Haq was targeted in the Wajihiya subdistrict of al-Muqtadiya district in Diyala governorate near the Iranian border, while an attack was also carried out on the Babylon Movement in the Tel Kaif district of Nineveh.
In this context, the vulnerability in the security sector stems less from Iraqi actors entering the conflict and more from Iraqi territory becoming a stage for other actors to send messages, exert deterrence, and carry out indirect retaliation. At the same time, if the regional conflict spreads, non-state armed groups in Iraq could be drawn into the events, potentially turning the country into a conflict zone. In this framework, the success of political actors in controlling or containing these non-state armed groups will determine the limits of the security sector’s vulnerability.
Fragility of the politics
A similar vulnerability can be seen in Iraq’s political sphere. Official circles, including the Prime Minister’s office and the Foreign Ministry, have approached the crisis cautiously and do not view it as a “military dossier to take sides on.” During a meeting between Iraqi Foreign Minister Fuad Hussein and his Iranian counterpart Abbas Araghchi, Iraq explicitly rejected military escalation in response to Iran’s claims of legitimate defense, signaling Baghdad’s desire to remain outside the tensions. In this context, Iraq aims to position itself as a balancing actor rather than a front-line country. However, this official stance is at odds with Shiite political parties and the political wings of militia groups.
This situation shows that the core vulnerability in Iraqi politics stems not only from external pressures but also from the fragmented nature of internal decision-making mechanisms. While the Baghdad administration seeks to limit tensions and keep the country out of a regional war, Iran-aligned Shiite political parties and the political wings of militia groups are promoting a different narrative. As a result, policies set by state institutions in the foreign policy arena are being eroded by the geopolitical priorities of other actors.
In such an environment, the Iraqi government’s efforts to position itself as a balancing actor are becoming more fragile. Baghdad’s ability to maintain this line will depend on how effectively it can control armed and political actors within the country, beyond its diplomatic rhetoric. The encouragement of street movements by Iran-aligned actors is another factor testing the government’s cautious approach. In Baghdad, where a new government has yet to be formed, the rhetoric and actions of Iran-aligned groups could also create vulnerabilities for government formation scenarios. If these groups succeed in consolidating power through the government formation process, Iraq’s balancing policy could become ineffective. Therefore, even if continued U.S.-Israeli attacks on Iran do not produce a new realignment in Iraqi politics, they may make existing divisions more visible and harder to manage.
Economic vulnerabilities
Iraq’s economic vulnerability is rooted in the country’s heavy dependence on export revenues. More than 80% of the central budget comes directly from oil income, with roughly 90% of those exports passing through terminals in the Gulf. As a result, the closure of the Strait of Hormuz or prolonged operational disruptions could shrink Iraq’s budget revenues. With monthly oil revenues estimated at around $7 billion, a disruption in exports could reduce that income to below $1 billion. This scenario clearly illustrates the scale of the problem. Such a situation could complicate the financing of public expenditures, including salary payments. Therefore, tensions around the Strait of Hormuz represent not just an external geopolitical crisis for Iraq but a structural risk directly threatening public finances, budget balance, and domestic economic stability.
The second dimension of Iraq’s economic vulnerability is the lack of sufficient alternative routes if exports were to stop entirely. According to the Iraqi Ministry of Oil, shipments through the Ceyhan port are limited to about 210,000 barrels per day, and sales to Jordan could only provide minor support, clearly highlighting Iraq’s reliance on the Gulf exit. Even without an official closure of the Strait of Hormuz, more than 150 oil and gas tankers waiting in Gulf waters illustrate the potential scale of a disruption. Additionally, any decline in production or a halt in natural gas imports from Iran could disrupt fuel supplies to power plants, turning an economic crisis into an energy supply crisis.
In conclusion, while U.S.-Israeli attacks on Iran have not made Iraq a direct participant in the war, they have made the country’s vulnerabilities in security, politics, and the economy more visible and impactful. In the security sphere, Iraqi territory has become a stage for reciprocal messaging and indirect retaliation. Politically, the misalignment between Baghdad’s official balancing efforts and the agendas of non-state actors exacerbates fragility. Economically, high dependence on oil exports and energy supplies forms another core vulnerability. For Iraq, the main challenge is not becoming a direct front-line in the conflict but feeling the costs of regional escalation within its internal balances. The expansion of the intervention against Iran would test Iraq’s capacity to maintain balance. Conversely, strengthening security control, limiting political fragmentation, and implementing measures to reduce energy and export dependency will be critical in mitigating these effects. Otherwise, Iraq risks becoming a country that bears the costs of war without actually entering it.
