April 21 (Reuters) – U.S. President Donald Trump’s administration has halted U.S. dollar shipments to Iraq and frozen security cooperation programs with its military, as it presses Baghdad to dismantle Iranian-backed militias operating in the country, the Wall Street Journal reported on Tuesday, citing Iraqi and U.S. officials.
U.S. Treasury Department officials recently blocked a delivery of nearly $500 million in U.S. banknotes – the proceeds of Iraqi oil sales – from accounts at the Federal Reserve Bank of New York, the Journal said.
Reuters could not immediately verify the report. The U.S. Treasury Department and the Federal Reserve did not immediately respond to a request for comment.
Washington has also informed Baghdad it is suspending funding for some counter-terrorism and military training programs until militia attacks end and Iraqi authorities take steps to dismantle armed groups, the report added.
The United States earlier this month summoned Iraq’s ambassador after a drone struck a major U.S. diplomatic facility in Baghdad, following a series of drone attacks that Washington has blamed on Iran‑aligned “terrorist militias.”
(Reporting by Ananya Palyekar in Bengaluru; Editing by Tom Hogue and Kate Mayberry)
Copyright 2026 Thomson Reuters.
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