Iraq Negotiates US Sanctions Exemptions Amid Iranian Flight Ban

The Iraqi government has initiated direct negotiations with Washington to secure humanitarian exemptions from sweeping US aviation sanctions that have grounded Iranian airlines across major Iraqi hubs, including Baghdad and Najaf. The ban, which took effect on September 23, 2026, as part of the U.S. Treasury's "Operation Economic Outcast," has stranded thousands of religious pilgrims, students, and medical patients. While Prime Minister Ali al-Zaidi's administration attempts to balance its strategic alliance with the U.S. against its deep ties with Tehran, the move has sparked intense domestic backlash. Iraqi Resistance factions have threatened nationwide sit-ins, and parliamentary leaders warn of a potential 40% collapse in the national power grid should Iran retaliate by cutting essential natural gas exports.

// Background

The aviation ban is a component of a broader economic and military conflict that escalated following US and Israeli strikes on Iran in February 2026. Iraq occupies a precarious position, relying on Iran for approximately 30-40% of its electricity generation via natural gas imports and hosting millions of Iranian pilgrims annually, while its central bank remains dependent on the US Federal Reserve for dollar liquidity.

// Key Developments

• Iraq suspended Iranian flights at Baghdad, Najaf, Erbil, and Sulaimaniyah airports to comply with US Treasury secondary sanctions.
• Prime Minister Ali al-Zaidi is seeking exemptions for humanitarian travel, specifically for medical treatment, education, and religious visits.
• US Treasury Secretary Scott Bessent warned that any entity providing fuel, landing, or ticketing services to 27 sanctioned Iranian carriers will be excluded from the US dollar system.
• Iraqi Deputy Speaker Adnan Faihan al-Dulaimi labeled the ban unconstitutional and warned of severe economic losses in the religious tourism sector.
• Iranian officials have issued retaliatory warnings, suggesting that if Iranian aviation is blocked, regional aviation for other countries may also be disrupted.
• Resistance groups, including Harakat Hezbollah al-Nujaba and Kata’ib Hezbollah, have called for mass protests and a religious fatwa against the 'unjust siege'.