Challenges to Iran’s Role in Iraq in the Post-Soleimani Era

Iran’s Interests in Iraq

From the Ba’ath Party’s coup in 1968 until the US-led invasion of Iraq in 2003, rela­tions between Tehran and Baghdad were never good-neighborly or normal. In 1980, just one year after the victory of the Islamic Revolution in Iran, the decade-long rivalry for regional dominance between the two countries gave way to full-blown war, which started with the Iraqi invasion of Iranian territory.

Three decades on, lessons learned by Iranian leaders from eight years of war and decades of rivalry with Iraq continue to shape Tehran’s perception of its strategic interests in the neighboring country. Accord­ing to this perception, a strong Iraqi state, dominated by nationalist or pan-Arab forces, is a potential threat to Iran. There­fore, Tehran has always sought to ensure that such forces would not regain power in Baghdad. Instead, Iran has supported Shiite groups in line with the Islamic Republic’s ideology to present them as an effective alter­native to Sunni, nationalist, or pan-Arab factions, which traditionally do not hold a favorable view of Iran. From this perspective, even if Shiite groups are un­able to fully and sustainably dominate the Iraqi government, their strong presence is seen as necessary to maintain a balance of power in Iraq, given that they share Iran’s negative view toward the presence of the US and its allies in the country. In the same vein, Iran has always tried to maintain unity among various Shiite factions in Iraq and position them against anti-Iranian currents.

In addition, Iraq is of great geopolitical importance in Iran’s regional strategy. As a western neighbor to Iran and an eastern neighbor to Syria, Iraq allows the Islamic Republic to secure a land connection to its allies in Syria and Lebanon. Especially since the start of the Syrian war in 2011 and the rise of ISIS in 2014, this land connection has allowed Iran-backed militias to move easily between the three countries to coun­t­er perceived threats against the Iran-led axis in the region. At the same time, this geo­political importance makes Tehran very sensitive to the presence and activities of rival powers in Iraq. This was the main reason why, in the post-2003 period, Iran tried, through its allied militias, to prevent Iraq from becoming a permanent zone of influence for Washington and its allies, an approach that continues to be at the heart of Iran’s strategy in Iraq. Iran has had similar, albeit relatively less, sensitivity to the influence of regional rivals, such as Turkey and Saudi Arabia, in Iraq.

Economically, Tehran sees Iraq as a potential market for Iranian goods as well as electricity and gas exports. At the same time, Iran tends to take advantage of Iraq’s geographical location to establish transit routes to Syria, the Mediterranean, and eventually Europe. Finally, in the social sphere, the Islamic Republic has sought to provide a social and ideological ground for expanding its influence in the neighboring country by gaining the support of the Iraqi people, especially the Shiites.

Among these interests and priorities, Iran’s desire for exclusive influence in Iraq has been at odds with the interests of West­ern countries. Although Iran’s domestic economic problems have never allowed it to become an unrivaled actor in the Iraqi market, in the political and security spheres, Iran’s influence has effectively prevented successive Iraqi governments from developing any serious pro-Western approach. At the same time, the continued activities of Iran-backed groups have been at odds with the European desire to regain stability through inclusive rule and good governance in Iraq. Similarly, Iranian influ­ence has limited the possibility of forming a strong and genuinely independent govern­ment in Iraq. In fact, so far, the only serious area of common interest between Iran and the EU in Iraq has been the fight against jihadi terrorism, especially ISIS.

As for the role of Soleimani, he was long considered to be the main architect of Iran’s regional strategy. Under his com­mand, the IRGC’s elite Quds Force, which used to act mainly as a secretive and clan­destine force, gradually came out of the shadows and became Tehran’s main in­stru­ment to advance its regional interests. In fact, Soleimani was in charge of commanding or coordinating a vast network of Iran-backed militias from Iraq to Syria and Yemen. He also enjoyed close ties with a number of regional politicians, such as Syrian President Bashar al-Assad and promi­nent Shiite figures in Iraq. Therefore, by giving the green light for his assassination, Trump actually wanted to deal a severe blow to Iran’s influence in the region, in­cluding in Iraq. And indeed, Iran has since been faced with increasing challenges in realizing its interests.

Geopolitical Challenges

Among these challenges, geopolitical chal­lenges are key. This refers to the role of Iran’s rival powers in Iraq and Iran’s efforts to contain their influence. In this context, Iran sees the US, the Arab states of the Persian Gulf, and Turkey as its main rivals in the competition for more influence in Iraq. Immediately after Soleimani’s assassi­nation, Iranian officials, including Supreme Leader Ayatollah Seyyed Ali Khamenei, promised “severe revenge” against the US. A few days later, the IRGC launched a large-scale missile attack on US airbase Ain al‑Assad in Anbar province. Following the attack, Khamenei declared that “the ex­pulsion of American troops from the region” had become a strategic goal for Iran. At the same time, the Shiite-domi­nated Iraqi parliament passed a resolution calling on the government to end the pres­ence of all foreign troops in Iraq, pointing specifically to the US-led coalition fighting ISIS.

In practice, however, things did not go exactly as Iran had hoped. On the same day, Trump said, “At some point, we want to get out [of Iraq],” but he emphasized that “this is not the right point.” Two months later, the US began handing over some military bases under its control to the Iraqi gov­ern­ment. By the end of August 2020, US forces had evacuated eight bases. However, it soon became clear that the evacuation of these bases was not a prelude to a complete US withdrawal from Iraq, but instead was part of a redeployment plan to strengthen criti­cal positions. In April, the US installed Patri­ot missile defense systems at Ain al‑Assad airbase. A few months later, in February 2021, it was announced that Washing­ton was developing Al-Harir base in the Iraqi Kurdistan region. In addition, some US troops leaving Iraq were dispatched to US bases in Syria. The redeployment of Ameri­can forces from Iraq to Syria did not solve Iran’s problem but simply moved it to an­other arena. After all, Iran is pursuing a similar goal in Syria, which is to reduce US influence and expand its own. At the same time, Washington’s focus on strengthening its bases in Iraq’s Sunni and Kurdish areas has raised concerns in Iran that the Ameri­cans may consider the partitioning of Iraq as a serious plan B.

In this context, Iran-backed militias doubled down on their attacks against US positions in Iraq in order to put more pres­sure on Washington. From the first half of 2020 onwards, a range of new armed groups, believed to be backed by Iran and the PMF, began routine attacks on US posi­tions in Iraq to increase pressure on the Americans. By April 2021, at least 15 new militias had been formed in Iraq to counter the US presence. The attacks, however, increased the risk of a direct confrontation between Tehran and Washington, leading to Khamenei reportedly calling for an end to the attacks in October 2020. The attacks intensified once again after Trump handed over the presidency to Joe Biden. Yet, the Biden administration has shown no less of a commitment in countering Iranian influ­ence. In this vein, in February 2021, Biden ordered a strike on the positions of Kata’ib Hezbollah, one of the major Iran-backed mili­tias in Iraq. In late June, the US launched a similar attack on the positions of Iran-backed groups on Iraq’s border with Syria.

In June 2020, a US-Iraqi strategic dia­logue began, one of the goals of which, according to Iraqi officials, was to discuss the withdrawal of US troops. By January 2021, the number of American troops in Iraq had already dropped from more than 5,000 to about 2,500. However, when Iran seemed to be finally achieving its goal, NATO announced that it would increase its forces in Iraq from 500 to 4,000 at the request of the Iraqi government. Although the task of those forces is said to be to carry out training and advisory missions, Iran believes that the US wants to continue its presence in Iraq under the cover of NATO. What is more, given the international com­position of NATO forces and its non-combat nature, Iran-backed militias will have a more challenging time justifying possible attacks against them. In sum, as far as the presence of the US and its NATO allies in Iraq is concerned, Iran has not only failed to achieve its primary goal but is actually facing a more complex situation.

Political Challenges

Political challenges to Iran’s role in Iraq are more directly related to the loss of Solei­mani as a central actor. Soleimani’s role in Iraq was not limited to commanding Iranian forces and Iran-backed groups. He was also a charismatic and consensus-building figure who served Iran’s interests in Iraq in at least two ways: first, by making sure that the Iraqi government would not act against Tehran’s interests, and second, by mediating between different Shiite factions and preventing divisions among them. To fulfill those delicate tasks, he maintained personal relations with sub­sequent Iraqi prime ministers, as well as militia and political figures.

When Soleimani was assassinated, Iran-backed Prime Minister Adil Abdul-Mahdi had already resigned due to the 2019 wide­spread protests but was still in office as a caretaker. Although Mohammed Tawfiq Allawi, the first nominee to succeed Abdul-Mahdi, was a favorable option for Iran, the lack of consensus among Shiite factions prevented Iran from publicly supporting him. The second nominee, Adnan al-Zurfi, was seen as a pro-US figure by Iran and the Iraqi Shiite groups, whose prime ministership could jeopardize their interests. That was why, despite strong opposition from some Shiite factions such as Kata’ib Hez­bollah, Iran eventually agreed to support Mustafa al-Kadhimi to become the new prime minister.

Ever since, however, Kadhimi’s attempts to balance Iraq’s foreign relations, especially between Iran and the Arab states of the Persian Gulf, have caused irritation with the Islamic Republic. He also openly calls for maintaining Iraq’s close relationship with the US. Kadhimi has also taken several measures to limit the PMF’s power, which is also a challenge for Tehran and its allies.

Economic Challenges

As part of his maximum pressure campaign, Trump imposed severe sanctions on Iran, called by his Secretary of State, Mike Pom­peo, “the strongest sanctions in history.” The sanctions had an undeniable impact on Iran’s economic situation and, consequently, on the level of its foreign trade and invest­ment. This was while in 2016, after the sign­ing of the Joint Comprehensive Plan of Action (JCPOA), Iran was experiencing a considerable 12.5 percent increase in eco­nomic growth. Iran’s economy shrunk by about 4.99 percent from 2017 to the end of 2020. Also, Iran’s exports to Iraq decreased from $8.9 billion (March 2018 to March 2019) to $7.4 billion (March 2020 to March 2021). The Covid-19 crisis, which led to the closure of Iran’s borders for several months and the inter­ruption of trade with neighboring coun­tries, also contributed to the downturn.

This came against the backdrop of Iran’s plans to counter the negative impacts of US sanctions by expanding economic ties with Iraq and other neighboring countries with­in the framework of the so-called neighbors policy. However, alongside sanctions and the Covid-19 crisis, ironically, Soleimani’s assassination marginalized the economic approach in Iran’s policy toward Iraq in favor of a more security-oriented view. Im­mediately after Soleimani’s assassination, the Iranian parliament passed a bill to increase the Quds Force’s budget by €200 million. At the beginning of 2021, MPs once again called for an increase in the force’s budget. Iran’s frozen funds in Iraq have been another economic issue. By the end of 2020, Iran was not able to access an esti­mated $3.5 billion due to US sanctions. Tehran hopes that progress in the ongoing talks to revive the JCPOA will eventually convince the US to release the funds.

All this has happened while Iran’s rivals have been increasing their economic in­fluence in Iraq. For example, the UAE’s exports to Iraq increased from about $11 billion in 2017 to $13.7 in 2019. During the same period, Turkey’s exports to Iraq also increased from about $9 billion to $10.2 billion. At the same time, Iraq’s depend­ence on gas and electricity imports from Iran has led some Arab countries to con­sider reducing Iran’s influence by offering alternatives to Baghdad. In November 2020, it was announced that Iraq would join a Gulf Cooperation Council electricity net­work linked to Saudi Arabia. Qatar has also expressed readiness to export gas (used in gas-fired power plants to produce electricity) to Iraq to resolve the country’s electricity crisis. Some estimates suggest that Iraq will have almost no need to import gas from Iran in the next five years and may even become a gas exporter in the region.

On the other hand, although Iran’s plan to build a railway from the Shalamcheh border area to Basra – which could facili­tate Iran’s land access to Syria and the Medi­terranean – has not yet been realized, Ankara intends to build a railway from Basra to the Turkish border. The railway could provide Ankara with easier access to the Iraqi market while derailing Tehran’s long-term plans to be at the center of East–West transit networks. If Iran’s rivals man­age to consolidate their economic influence in Iraq, Iran will not be able to reclaim its share of the Iraqi market, even if the do­mes­tic economic situation improves and sanctions are lifted.

Social Challenges

Iran and Iraq, two neighboring Shiite-major­ity countries, have significant histori­cal and cultural ties. The Ba’athist rule in Iraq, however, had for decades limited the possibility of close social ties between the Iranian and Iraqi people. After the fall of Saddam in 2003, Iran began its efforts to reach out to Iraqi Shiites (around 61.7 per­cent of Iraq’s population) and develop its soft power in the country. The more the prolonged presence of American troops in Iraq caused dissatisfaction among many Iraqis, the more Iran was successful in this field.

After the rise of ISIS in 2014, Iranian assistance to the Iraqi government in fight­ing the jihadis increased Iran’s popularity. According to the Independent Institute for Administration and Civil Society Studies, in 2017, about 70 percent of Iraqis had a positive view of Iran. However, in mid-2020, the same institute published another poll showing that Iran’s popularity had dropped to a mere 15 percent.

The reason for this decline in popularity should be sought more than anything re­gard­ing the activities of Iran-backed mili­tias, which are active arbitrarily and outside government control in the political, eco­nomic, and security spheres in various parts of the country. Some Iran-backed militias are involved in opaque or illegal economic activities. They levy taxes at checkpoints, extend control over engineering and con­struction companies, and interfere in the functioning of seaports. The groups have also been accused of cracking down on anti-government protests in late 2019 and assas­sinating opposition figures thereafter. PMF groups and commanders categorically deny the allegations. Nevertheless, those issues have contributed to the Iraqi people’s nega­tive attitude toward Iran.

But even before these developments, the inefficiency and weakness of the Iran-backed government made the Iraqi people sensitive to Iran’s role in their country. During the 2019 protests, Iraqi demonstrators attacked Iranian consulates in Najaf and Karbala – two Shiite-majority cities. The Iranian Centre for Strategic Research, which is affiliated with Iran’s Expediency Discernment Council, writes in a report that “the reaction to the 2019 protests has damaged the Islamic Republic’s image among the Iraqi elite and the public,” warning that “this could weaken Iran’s role in shaping Iraq’s future governments.” The report also notes that public dissatisfaction and criticism of Iran-backed PMF groups have increased in the aftermath of the pro­tests. Generally speaking, criticism of Iran seems to have become a regular part of popular and anti-government protests in Iraq. Those protests were the main reason behind the Iran-backed Abdul-Mahdi gov­ern­ment’s resignation in November 2019.

In early May 2021, after an activist was assassinated in Karbala, the Iranian con­sulate in the city was attacked by protesters, and its outer wall was set on fire. In fact, regardless of the extent of Iran’s support or even knowledge of the activities of the Iraqi militias, the close ties between Iran and those groups have led a large segment of the Iraqi people to see Iran’s hand in every unfortunate event and to seek to limit Tehran’s influence in their country.

Conclusions and Recommen­dations for German and Euro­pean Policies

Contrary to President Trump’s intention, Soleimani’s assassination did not significantly change Iran’s role in Iraq in the short term, nor could it deter Iran-backed militias from targeting US interests. On the con­trary, threats against US positions and troops in Iraq have since significantly in­creased. That said, in the post-Soleimani era, Iran faces growing challenges to its role in Iraq. On the one hand, Iran has failed to achieve its ultimate goal of rooting out the US presence in Iraq, with Washington and Baghdad actively working on maintaining their strategic relationship. At the same time, Tehran’s obsession with confronting the US has come at the expense of Iran’s economic and social influence in Iraq. Under these circumstances, regional rivals – in particular Turkey and Arab monarchies of the Persian Gulf – have found fertile ground to expand their influence in Iraq, and the Iraqi government welcomes them to balance Iran’s role. To make things even more challenging for Tehran, Shiite politi­cal and militant groups are also increasingly showing signs of divergence from, or at least non-compliance with, Iran’s approach­es and priorities.

These trends could lead to more instability in Iraq as a result of foreign rivalries (be­tween Iran and its adversaries) and domes­tic competitions (within various militias, as well as between them and the government). Yet, Kadhimi’s apparent desire to establish a balance in Iraq’s foreign relations and con­solidate the central government’s authority at home is a promising sign for the stabilization of Iraq. Accordingly, Ger­many and its European partners should support Kadhimi’s initiatives in areas such as diversifying Iraq’s foreign partners, main­taining a strategic relationship with NATO, as well as establishing a state mo­nopoly over violence by curbing militias.

The Kadhimi government has also indicated that it wants Iraq not to be a scene for foreign rivalries but a venue for resolving them. Iraqi-mediated talks between Iran and Saudi Arabia that started in the spring of 2021 illustrate that endeavor. This aspect of the Iraqi government’s policy should also be encouraged and supported by European states. As a matter of principle, Europe’s Iraq policy should be based on supporting a strong government that pursues a multi-vector foreign policy. Such a government could contribute to the realization of Europe’s interest in a more stable Middle East.

Finally, it is important to note that although attacks by Iran-backed groups have been so far mostly limited to American interests, they also pose a potential threat to European soldiers in Iraq, who are tasked with training Iraqi security forces in the fight against ISIS. As such, establishing an indirect channel of communication – through the Iraqi government or Tehran – with those groups appears necessary to guar­anty the safety of European soldiers and personnel.