When President Donald Trump announced on 31 May that Tom Barrack would serve simultaneously as US Ambassador to Ankara, Special Presidential Envoy to Syria, and now Special Presidential Envoy to Iraq, the diplomatic community in Baghdad greeted the news with the mild interest one accords a routine reshuffling. They were wrong. Barrack is not arriving in the Iraqi capital with a briefing book and a handshake. He is arriving with a vault key — and the vault holds Baghdad’s oxygen.

Since 2003, Iraq’s hydrocarbon revenues have been deposited into a dedicated account at the Federal Reserve Bank of New York. When Baghdad needs hard currency, the Treasury arranges for physical dollar banknotes — sometimes as much as $13 billion in a single year — to be flown on cargo planes from New Jersey to the Central Bank of Iraq. It is an arrangement born of post-invasion necessity, designed to shield Iraq’s new government from Saddam-era creditors and reparation claims. It has since become something else entirely: the master switch of Iraqi political economy, controlled from lower Manhattan.

In April, the Trump administration quietly demonstrated just how absolute that control is. The Treasury blocked a cargo-plane delivery of nearly $500 million in US banknotes — proceeds from Iraqi oil sales — and simultaneously suspended security cooperation programs with the Iraqi military. A senior Kurdish official, speaking to Fox News, offered the most frank assessment heard in months: “The dollar pause is the nuclear option in the Treasury Department’s arsenal, and the Americans have always been reluctant to leverage it.”  Barrack’s appointment signals that the reluctance is over.

“The balance of power around which the United States operates works best when allies become more self-reliant and share the burden — always within a framework that preserves American influence, stability, and alignment with core US interests.” — Tom Barrack, Special Presidential Envoy for Syria and Iraq, June 2026

“The balance of power around which the United States operates works best when allies become more self-reliant and share the burden — always within a framework that preserves American influence, stability, and alignment with core US interests.”........

© Middle East Monitor