TEHRAN – Iraq’s November 11 election will test whether a new government will challenge U.S. control over oil revenues and sovereignty.

As Iraq heads to the polls this Tuesday, voters are choosing leaders who could reshape the country’s relationship with the United States. 

Many voters say Washington still controls key parts of their economy and politics, leaving the question of sovereignty unresolved more than two decades after the U.S. invasion.

In Iraq’s southern city of Basra, oil exports are booming. Tankers load millions of barrels of crude every day, bringing in billions of dollars. But this money does not go to the Central Bank in Baghdad. 

Instead, it is sent to accounts at the U.S. Federal Reserve, where it remains under American supervision.

These revenues are deposited into what was once known as the Development Fund for Iraq (DFI), later restructured into the “Iraq 2 Account” at the Federal Reserve Bank of New York. 

From there, funds are released to Iraq’s Ministry of Finance for government spending, but only after approval and clearance through the U.S. financial system. This setup allows Washington to monitor every dollar and, if necessary, delay or restrict Iraq’s access to its own oil income.

The system was first created in 2003 as a temporary safeguard after the fall of Saddam Hussein. It was meant to help Iraq manage its oil revenue transparently. 

Yet 22 years later, it still exists. The U.S. presidents have renewed the arrangement every year, most recently in May 2025. 

Critics say this has turned a short-term measure into long-term control. Officials in Baghdad estimate that between $80-$85 billion of Iraq’s oil revenues are now held in the U.S. Federal Reserve. 

Washington says the setup helps prevent corruption and protects Iraq’s economy. But many Iraqi voters argue it gives the U.S. too much leverage.

That leverage became clear when U.S. regulators restricted dozens of Iraqi banks from using dollars. The decision reduced the flow of dollars into Iraq, weakening the dinar and raising prices for everyday goods. For shopkeepers and traders, the result has been higher costs and shrinking profits.

“The Americans say it’s about stability, but we’re the ones paying the price,” said Ahmed, a trader in Baghdad’s Karrada district. “Our money is controlled by another country.”

The U.S. also keeps military forces in Iraq, something many voters still view as an occupation. Together, these economic and military ties have become key issues in the November 11 election. 

Several political blocs are promising to reclaim sovereignty by demanding control over Iraq’s oil and gas revenues and pushing for a faster and more transparent timeline to end the U.S. troop presence.

At a recent summit in Egypt, U.S. President Donald Trump told Iraqi Prime Minister Mohammed al-Sudani, “You have a lot of oil and you do not know how to handle it.” 

His comment fueled debate in Iraq over whether the U.S. still sees itself as Iraq’s guardian, or its overseer.

The next government will face a difficult choice: maintain the current system for stability, try to renegotiate it, or cut the link entirely. Each option carries serious risks for Iraq’s economy and relations with Washington.

When Iraqis vote this week, they will decide more than who leads them. They will decide whether their country can finally stand on its own, or whether America will continue holding the financial and political levers that shape Iraq’s future.