Trump Envoy Tom Barrack Pushes Iraq to Cut China and Russia Out of Its Oil Sector

The Trump administration is making another run at Iraq, and this time the target is China's decade of quiet economic entrenchment there.

U.S. Special Presidential Envoy Tom Barrack traveled to Iraq on Monday and issued a joint statement with Iraqi Prime Minister Ali al-Zaidi emphasizing American investment, particularly in energy, according to 964media. The visit followed a meeting last week between al-Zaidi and President Trump at the White House, where the two sides worked out what OilPrice.com describes as a new cooperation framework aimed at pulling Baghdad out of Beijing's and Moscow's orbit.

A senior European Union security source working with Washington on the matter told OilPrice.com that Trump's team is focused on replacing Iraq's existing deals with China with equivalent American agreements. That means unwinding, or at least diluting, arrangements like the 2019 'Oil for Reconstruction and Investment' agreement, which gave Chinese firms priority on new field contracts and steep discounts on Iraqi oil and gas.

China cut those deals when the U.S. presence in Iraq was at its weakest, in the years after Saddam Hussein's fall in 2003, as Iranian-backed militias kept attacking American forces even past the official end of the U.S. combat mission in Iraq in December 2023. Washington now wants that leverage back.

The Kurdistan Problem

According to researcher Abdul Salam Barwari, speaking on Alsharqiya and reported by 964media, the real substance of Barrack's visit was economic and security, not the diplomatic framing of encouraging government formation that appeared in the official statement.

Barwari said Washington's central concern is getting American oil companies operating in the Kurdistan Region back to full production. Most companies operating there under official contracts are American, and they've sunk millions of dollars into partnership agreements that have been frozen by violence.

Those companies suspended operations because of repeated drone and missile attacks on energy infrastructure by Iran-aligned factions. The attacks followed U.S.-Israeli strikes on Iran on February 28, which escalated into a wider regional conflict. Community Peacemaker Teams recorded 751 attacks in the Kurdistan region between the start of that conflict and May 28, causing 22 deaths and 112 injuries.

Now the companies want sovereign security guarantees, and they want them from Baghdad, not Erbil. Barwari said a security delegation led by Lt. Gen. Abdul Amir Yarallah visited Kurdistan two days before Barrack's trip specifically to lay groundwork for those guarantees. The message to Washington, in Barwari's telling, was that Baghdad would provide what's needed to get production moving again.

Why Iraq Can't Just Say No

Roughly 90% of Iraq's government revenue comes from oil exports, according to TBS News, and all of that oil export income is managed through accounts at the Federal Reserve Bank of New York, a legacy of a UN resolution and a 2003 executive order. That arrangement gives U.S. regulators final say over disbursing Iraq's oil money — leverage Washington has used before, including in 2020 when Baghdad threatened to expel U.S. troops and Washington warned it could simply cut off Iraq's funds.