The United States has resumed partial shipments of U.S. dollars to Iraq after suspending the transfers several months ago in an effort to pressure Baghdad to distance itself from Iran, according to officials close to Iraq’s prime minister. The move marks a shift in Washington’s approach toward Iraq amid ongoing tensions related to Iranian influence and militias operating within the country.

The suspension initially began in April under the Trump administration, which halted the flow of dollars that Iraq earned from its oil sales. The measure was aimed at curbing the activities of Iran-linked militias that have operated largely outside the control of the Iraqi government and have occasionally targeted U.S. personnel and interests in Iraq. Alongside the currency restrictions, the U.S. also reportedly suspended cooperation and funding for some of Iraq’s security services, a measure that remains in place according to an Iraqi official who requested anonymity.

Haider al-Aboudi, spokesman for the new Iraqi prime minister, Ali al-Zaidi, confirmed that the dollar shipments have now resumed. Mudir Muhaammad Salih, a financial adviser to al-Zaidi, also verified the reinstatement of the transfers, calling the issue resolved. The U.S. Treasury Department did not immediately respond to requests for comment.

The resumption occurs as al-Zaidi, who took office in late April following the suspension, has sought to tighten government control over militias aligned with Iran. One of his initial directives ordered all armed militias in Iraq to come under state authority. However, key groups such as Kataib Hezbollah have resisted government oversight. Kataib Hezbollah has been linked to attacks on U.S. targets and high-profile kidnappings, including that of a U.S. journalist earlier this year.

Underpinning the U.S. currency restrictions were concerns over illicit dollar transfers facilitated via Iraq’s central bank account at the Federal Reserve Bank of New York. International banking agreements established in recent years require transparency in these transfers to prevent the funds from reaching militant groups and criminal networks, including those linked to Iran.

The dollar shipments are integral to Iraq’s largely cash-based economy. The central bank manages wire transfers daily to support Iraqi businesses and individuals purchasing goods internationally, as many Iraqi enterprises lack direct access to foreign bank accounts.

Alongside efforts to rein in militias, al-Zaidi has launched an anticorruption campaign that has resulted in the arrest of dozens of current and former officials, including members of parliament. Last weekend alone, authorities detained 47 individuals suspected of corruption, and operations are ongoing according to state media reports.

Iraq continues to navigate a complex political and security landscape, caught between its two major allies, the United States and Iran. The recent easing of some U.S. sanctions on dollar transfers may signal a tentative step toward stabilizing the country’s economy and consolidating government control over security forces amid ongoing challenges.