IRAQ CAUGHT IN CROSSFIRE OF IRAN WAR AS BOTH SIDES LAUNCH ATTACKS ON ITS TERRITORY. (PHOTO).

 Iraq caught in crossfire of Iran war as both sides launch attacks on its territory

   

Iraq is increasingly being caught in the crossfire of the war involving Iran, becoming the only country facing attacks from both sides of the conflict. The situation threatens to pull the nation—until now largely spared from the broader regional turmoil—into a deeper crisis as the fighting approaches its second week.

The country’s economic outlook has grown more fragile as the conflict disrupts Gulf shipping lanes and damages oil infrastructure. Strikes targeting energy facilities and oil fields have sharply reduced exports, creating serious financial pressure for a government that depends heavily on oil revenues. Officials warn that if the shutdown continues, the government in Baghdad could struggle to pay its massive public-sector workforce as early as next month, a scenario that could trigger widespread unrest.

In an attempt to stabilize the situation, the federal government has urged Kurdish leaders in the north to resume oil exports through a pipeline that runs to Turkey. Negotiations remain stalled, however, because of longstanding disputes between Baghdad and the Kurdish regional government over economic and political issues. Without an agreement, Iraq has limited options to restore lost revenue from oil exports.

At the same time, the broader regional conflict has sparked a parallel confrontation inside Iraq between Iran-backed militia groups and U.S. forces. Drone and missile attacks have targeted American bases, diplomatic facilities, and energy infrastructure across the country. The United States has responded with strikes on militia positions, escalating tensions and increasing the risk that Iraq could become a direct battleground.

Since the war began in late February following major strikes on Iranian territory, attacks linked to Iranian allies have struck several locations in Iraq, including facilities connected to U.S. forces near Baghdad and Irbil. Oil infrastructure has also been targeted, adding to the economic strain.

Unlike many neighboring countries affected by the conflict, Iraq hosts both powerful Iran-aligned militias and significant U.S. military and diplomatic assets. This unique position makes the country particularly vulnerable as hostilities escalate. With its economy overwhelmingly dependent on oil exports, disruptions to shipping routes such as the Strait of Hormuz threaten to sharply reduce government revenue at a time when the country is already dealing with political uncertainty.

Iraqi leaders in Baghdad and in the Kurdish capital of Irbil have repeatedly called for restraint and insisted that their territory should not be used as a battleground. However, the conflict’s trajectory appears increasingly beyond their control. In the early days of the war, rockets and drones began striking U.S. facilities, diplomatic sites and oil infrastructure across Iraq. In Irbil, drone attacks have occurred almost daily, sometimes targeting commercial sites and hotels in addition to areas connected to foreign operations.

Iran-backed groups have also launched strikes against Kurdish opposition factions based in northern Iraq amid reports that the United States might support them in operations against Iran. Some Kurdish groups have indicated they would consider cross-border actions if they received outside backing.

The political situation in Iraq further complicates the crisis. The country is currently governed by a caretaker administration after political disputes prevented the formation of a new government. The interim leadership has limited authority and faces difficulty controlling the powerful militia groups operating across the country.

Meanwhile, U.S. forces have carried out retaliatory strikes on militia positions in several areas, including locations south of Baghdad, along the Iraq-Syria border and in northern regions.

For ordinary Iraqis, the violence has become part of daily life. In Irbil, residents at a local café recently heard the sound of incoming drones followed by an explosion as air defenses intercepted one of the aircraft. Despite the incident, people continued their routines, reflecting the resilience many Iraqis have developed after years of conflict.

The greatest threat to Iraq’s stability remains the disruption of its oil industry. Government officials have warned that continued losses in production and exports could cripple public finances. Oil accounts for more than 90% of the country’s government revenue, and Iraq has one of the world’s largest public-sector payrolls. In the past, delays in salary payments have triggered widespread protests.

Several oil fields have already halted production after being struck or threatened by attacks. In the Kurdish region, companies operating key energy blocks have suspended operations, further reducing output.

The conflict has also worsened electricity shortages. The shutdown of a major gas field in the Kurdish region has slashed power generation, leaving households with only a few hours of electricity per day in areas that previously had round-the-clock supply.

Political divisions within Iraq add another layer of instability. Some factions favor stronger ties with Iran, while others support closer cooperation with the United States and Western countries. These competing loyalties make it more difficult for leaders to maintain a neutral stance as the war intensifies.

Despite these challenges, Iraq has so far managed to avoid the broader regional upheaval that has spread across the Middle East since the conflict began in 2023. Political and religious leaders continue to urge calm and stress the importance of keeping the country out of a wider war.

However, as the fighting escalates and economic pressures mount, Iraq’s fragile stability is facing one of its most serious tests in years.