The U.S. Treasury Department has removed the Iraqi airline Fly Baghdad, also known as Iraq Express, from its terrorism sanctions list. The decision, announced on Wednesday, also included the delisting of two Boeing 737 aircraft registered as YI-BAF and YI-BAN. This move comes amid discussions about a potential reopening of the Strait of Hormuz, an important maritime chokepoint, a possibility raised recently by President Donald Trump.

Fly Baghdad had previously been subject to sanctions due to alleged ties to the Iranian Revolutionary Guard. However, a Treasury Department spokeswoman stated that the airline had undertaken significant operational changes, which led to the reevaluation and subsequent removal from the sanctions list. Specific details about the nature of these changes were not disclosed.

The U.S. government’s decision reflects a shift in its approach to entities linked to Iran amid ongoing geopolitical considerations in the region. The removal of Fly Baghdad from the sanctions list indicates a calibrated effort to encourage compliance and improved practices among companies that were once considered high risk due to their connections.

The Strait of Hormuz, through which about a fifth of the world's oil passes, has been a focal point of tensions between the United States and Iran. Moves to reopen or ensure safe passage through the strait have considerable implications for global energy markets and regional security.

This update follows a period in which the U.S. maintained stringent sanctions targeting companies and individuals tied to the Iranian Revolutionary Guard as part of its broader pressure campaign against Iran’s regional activities. The delisting of Fly Baghdad suggests a potential easing in this stance, contingent on demonstrated behavioral changes by the sanctioned entity.

The administration has not elaborated on whether further revisions to the sanctions list are anticipated, nor on how this decision fits into broader diplomatic or economic strategies concerning Iran and Iraq.