September 30, 2026 marked the end of a major chapter in Iraq’s contemporary history. The last US troops still deployed as part of the international coalition withdrew from their bases, primarily from Erbil. The pullout brought more than two decades of US military presence to a close, even as bilateral cooperation with Baghdad on training and intelligence was expected to continue.
It had all begun on March 20, 2003, when the United States under George W. Bush, alongside the United Kingdom and other allies, invaded Iraq to overthrow Saddam Hussein. The intervention was largely justified by claims that Baghdad still possessed weapons of mass destruction and was pursuing prohibited weapons programmes. Those stockpiles were never found after the invasion. Subsequent US investigations exposed serious intelligence failures over the true state of Iraq’s programmes, making the WMD argument one of the most contested foundations of the war.
Armed militias remain
Baghdad fell on April 9, 2003. The intervention ushered in a long period of occupation, insurgency and sectarian violence that profoundly reshaped Iraq and, paradoxically, strengthened Iran’s influence in the country.
US forces first withdrew from Iraq at the end of 2011. Three years later, however, the collapse of parts of the Iraqi army in the face of ISIS dramatically changed the situation. After the jihadist group captured Mosul on June 10, 2014, it seized vast stretches of territory. Washington returned at Baghdad’s request, this time as part of a coalition supporting Iraqi forces against ISIS. An agreement reached between the two countries in September 2024 ultimately set out the phased withdrawal completed on September 30.
But the US departure did not resolve the main sovereignty challenge facing Baghdad: the presence of armed factions close to Iran. Strengthened after Grand Ayatollah Ali al-Sistani’s June 2014 call to mobilise against ISIS, the Popular Mobilization Forces, or Hashd al-Shaabi, were formally incorporated into Iraq’s security apparatus in 2016. Several factions nevertheless retained their own chains of command, arsenals and close ties to Tehran.
Prime Minister Ali al-Zaidi had initially set September 30 as the deadline for bringing those weapons under state control. The logic appeared straightforward: if some factions justified retaining their arsenals because of the US military presence, the American withdrawal should have paved the way for disarmament. Five groups rejected that reasoning. On September 21, in New York, Zaidi therefore pushed the deadline back to June 30, 2027, favouring negotiations over a confrontation that risked triggering intra-Shia conflict.
Washington’s leverage over Iraq’s oil revenues
Another concern then emerged: the risk of a “Hezbollahisation” of Iraq — a state with its own government and armed forces, but forced to coexist indefinitely with organisations retaining independent military capabilities and substantial political influence.
And while US troops have left, Washington still retains another powerful lever: Iraq’s finances. Since the 2003 invasion, the country’s oil revenues have flowed through a mechanism linked to the Federal Reserve Bank of New York. The Development Fund for Iraq, created after Saddam Hussein’s fall to finance reconstruction and shield Iraqi revenues from creditors, was later replaced by an account held by the Central Bank of Iraq at the Fed.
The arrangement was particularly significant because oil accounted for around 90% of Iraq’s state budget. By controlling Iraq’s physical access to dollars generated by those revenues and their transfer to Baghdad, Washington retained considerable leverage over the Iraqi financial system, particularly in its efforts to curb funding networks linked to Iran.
September 30, 2026 therefore did not mark the end of US influence in Iraq, but rather its transformation. After twenty-three years dominated by troops, military bases and the fight against ISIS, the focus had shifted to militias, financial flows and Baghdad’s ability to assert the authority of the state.