BAGHDAD (Dispatches) -- A phone call between a senior Iraqi diplomat and former President Abdul Latif Rashid has revealed deep concerns within Baghdad over Prime Minister Ali al-Zaidi’s handling of sensitive U.S. pressures involving Iran, according to The Cradle. 
The Iraqi delegation at the UN General Assembly was blindsided by Zaidi’s meeting with President Trump in New York, learning of it only through the media. This raised questions about coordination within the Iraqi state on matters concerning Washington and Tehran, The Cradle reported.
The meeting was followed by an Iraqi directive restricting Iranian flights, amid U.S. warnings of Treasury measures for non-compliance. Ministers, fearing unassessed political, security, and economic consequences, asked Zaidi for time to find another path. 
They warned that a swift concession could bring Baghdad into conflict with armed factions already wary of its dealings with Washington. The internal argument was over how much U.S. pressure Iraq could absorb before the political cost fell on Baghdad itself, according to The Cradle.
Iraq moved quickly against Iranian aviation, initially defended by lawmakers and analysts as a necessary compliance to avoid greater costs, given Iraq’s dependence on the dollar system and oil revenues. 
However, this position became harder to sustain as the disruption reached the shrine city of Najaf. Protests backed by Harakat al-Nujaba and Kataib Hezbollah erupted outside the airport, bringing the issue back to negotiations.
Foreign Minister Fuad Hussein met with U.S. Treasury Secretary Scott Bessent on October 1, where the Treasury’s account specifically mentioned Shia pilgrimages to Najaf alongside Washington’s pressure campaign against Iran. 
Negotiations focused first on a limited arrangement for Iraqi flights, then turned to Iranian carriers and conditions involving sanctioned passengers, passenger information, and scrutiny of transactions at Najaf Airport, according to The Cradle.
On October 2, the prime minister’s office announced an exemption allowing Iranian airlines to resume flights to Najaf, except Mahan Air. The airport had halted Iranian flights on September 25. 
Sources told The Cradle that Iraq had pressed for an initial conditional exemption for Iraqi carriers before seeking relief for Iranian airlines, with proposed checks on travelers under U.S. sanctions, passenger manifests, and financial transactions. 
American requirements also covered payments for fuel and ground handling and record retention for up to ten years.
The answer to why Iraq responds so quickly to American pressure lies partly in U.S. troops and the political relationship, but more powerfully in the financial system. 
Iraqi oil receipts are held in accounts at the Federal Reserve Bank of New York, under arrangements administered by Iraqi institutions. The system has outlived its origins. 
Baghdad manages the funds, but its dollars still move through channels Washington can restrict. Any Iraqi leader considering a confrontation with the U.S. must weigh what delays to bank transfers would mean for imports, salaries, and the oil-funded state budget. 
The withdrawal of U.S. forces is a victory for Iraq, but political sovereignty will remain constrained while oil dominates public revenue and its dollar proceeds move through financial channels Washington can influence.