July 23, 2019, 1:02 PM MDT
(Bloomberg) — Drones have been downed and tankers attacked in the Persian Gulf as U.S.-Iran tensions raise fears of war around a critical oil chokepoint. But any conflict between rivals might actually start in the one country where both sides have forces on the ground: Iraq.After two wars with America since 1990, a brutal civil conflict and the rise of Islamic State more recently, about 5,200 U.S. troops are stationed in Iraq — amid thousands of Iranian-backed Shiite militias, controlled by officials in Baghdad sympathetic to Tehran.That complicated reality leaves Iraqi officials in a difficult situation as they navigate security ties with the U.S. and their political and religious links to Iran, according to Ali Vaez, director of the Iran Project at the International Crisis Group.“The Iraqi government cannot afford to alienate either side,” Vaez said in a phone interview from Washington. “That is exactly why now it finds itself between a rock and hard place.”So far direct conflict has been avoided, and open warfare is unlikely given greater U.S. firepower, but it’s an uneasy lull. The U.S. pulled non-emergency staff from its embassy in Baghdad — its largest and most expensive mission in the world — and closed its consulate in Basra late last year as officials worried that Iran was undermining Iraq’s central authority, as well as Washington’s influence. The consulate remains closed.Exxon Mobil Corp. temporarily evacuated its foreign employees from a camp near the West Qurna-1 oil field in Basra in southern Iraq after a nearby rocket attack. In June, rockets hit an official compound in the northern Iraqi city of Mosul and the Taji Military camp near Baghdad, both of which house American military advisers, according to local press reports.Some “rogue” Iranian-backed militias “plot against U.S. interests and plan operations that could kill Americans, coalition partners and Iraqis,” Joan Polaschik, the acting principal deputy assistant secretary of state for Near Eastern affairs, said at a Senate hearing last week. These groups monitor U.S. diplomatic facilities and “continue to conduct indirect fire attacks,” she said.At the same hearing, Deputy Assistant Secretary of Defense for the Middle East Michael Mulroy said that Iran’s “cynical interference” undermines Iraqi interests and “jeopardizes” stability.‘Loyal to Tehran’“Our primary concern is the extent to which noncompliant militias, more loyal to Tehran than Baghdad, undermine the Iraqi prime minister’s legitimate authority, prey on ordinary Iraqis and destabilize the fragile communities recently liberated from ISIS control,” Mulroy said.Iran’s influence with Iraq was highlighted on Monday when Iraq’s Prime Minister Adel Abdul Mahdi met with Iran’s President Hassan Rouhani in Tehran and discussed ways to defuse the ongoing crisis in the region. In the latest flare-ups, Iran said it will execute a group of alleged CIA-trained spies, while Tehran and London remain in a standoff over a pair of seized oil tankers.Caught in the middle, the Iraqi government “tries to control the situation” by being a “calming factor” in the region, said Raid Fahmi, an Iraqi lawmaker with the Shiite leader Moqtada al-Sadr-backed Saeroon alliance. “If the situation escalated and moved to armed clashes, then this could have consequences. Iraq could become part of the conflict because there are political parties” that would consider this as “their battle against the U.S.,“ he said.Iranian officials regularly tout their access to top Iraqi officials as well as their ability to travel the country openly, a stark contrast to American diplomats and administration officials who usually remain hunkered down.When Rouhani visited Iraq in March, he met with Grand Ayatollah Ali al-Sistani, the country’s most revered Shiite cleric. President Donald Trump, who earlier this year angered Iraqi lawmakers by saying U.S. troops in the country were needed to keep “watch” on Iran, visited American forces northwest of Baghdad in December but didn’t meet with any top Iraqi officials.Syrian AllianceFor Iran, Iraq is a strategic link in its regional policy that pits it against the U.S. and America’s allies, including Saudi Arabia and the United Arab Emirates. The Iranians have backed Syrian President Bashar al-Assad and the Shiite Houthi rebels in Yemen in regional proxy wars, and bolstered ties with Qatar — which hosts a key U.S. military base — after the emirate was economically isolated by a Saudi-led bloc of nations two years ago.On rare occasions, U.S. and Iranian interests in Iraq converge, as they did when forces from both sides fought separately to oust Islamic State from the country after the terrorist group gained a foothold about five years ago.Hussein EraIran’s ability to influence politics in Iraq goes back to the era of Saddam Hussein, a Sunni. Then, many in Iraq’s Shiite majority fled across the border into Iran to escape imprisonment, execution and torture. Over decades, they built close ties to Iranian officials, became members of the Islamic Revolutionary Guard Corps, learned Persian and married into Iranian families, according to Ali Alfoneh, a senior fellow at the Arab Gulf States Institute in Washington.After the U.S. toppled Hussein and his Baathist party in 2003, they returned to join the government or support powerful Shiite militias.“Large parts of the Iraqi civil-military establishment, not just the militias, are very closely aligned to Iran,” said Kamran Bokhari, founding director at the Center for Global Policy and a non-resident scholar at the Arabia Foundation. “Iran’s influence is far greater in Iraq than that of the United States.”This month, in what was viewed as a nod to Washington, Iraq moved to curtail the power of Iran-backed militias in the Popular Mobilization Forces by putting them under the formal command of the military. Its decision was welcomed by U.S. officials, though cautiously.‘Flouted’ GovernmentElements of the militia forces, “fought bravely against ISIS and earned public respect,” the Pentagon’s Mulroy said. “But in recent years, Iran-backed, semi-autonomous militias have consistently flouted the government of Iraq and turned to local criminality for self-enrichment. ”Under Trump, the U.S. has ramped up its policy of “maximum pressure” on Iran after the president withdrew from the 2015 nuclear accord, and that effort shows little sign of easing. With Islamic State’s so-called caliphate largely wiped out, the U.S. wants Iran to get out of Iraq, seeing it as another example of Tehran’s regional meddling.“Iran must respect the sovereignty of Iraq and other regional states, cease destabilizing activities in the region, and refrain from actions that inflame sectarian tensions or empower extremists,” Commander Sean Robertson, a Pentagon spokesman, said in an email.The potential of a conflict in Iraq — intended or not — is something Iranian officials worry about too, Vaez of the International Crisis Group said.“I asked a very senior Iranian official a few months ago of all of these flash points around the region — from the Strait of Hormuz, to Yemen, to the Golan Heights, to Iraq, to Lebanon — which one worries him the most?” Vaez said. “And he said Iraq.”(Updates with Iraqi lawmaker comment in 11th paragraph.)\–With assistance from Kevin Crowley and Khalid Al-Ansary.To contact the reporter on this story: Glen Carey in Washington at firstname.lastname@example.orgTo contact the editors responsible for this story: Bill Faries at email@example.com, Larry LiebertFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.