Iran Is Losing Iraq

July 10, 2026
Kamaran Palani

Baghdad Goes Its Own Way

Whenever the Iran war comes to an end, the Islamic Republic is likely to emerge in a stronger position. Should the terms of a June memorandum of understanding be met, Western governments would lift many sanctions on Tehran and the country would gradually be reintegrated into the global economy. Iranian control of the Strait of Hormuz, once an open waterway, might be formalized through some kind of joint tolling system. And Iran might be free to reconstitute its ballistic missiles and drone capabilities, weapons that proved very useful in the most recent months of fighting.
But at least in one area, the war has left Iran notably weaker: Iraq. Ever since the toppling of the Iraqi dictator Saddam Hussein in 2003, Iran has been able to exercise a great deal of influence over its western neighbor. It has embedded itself within Iraq’s Shiite political establishment, mediating between rival factions, shaping successive governments, and using Iraq to gain hard cash through smuggling and currency exchange networks. Iran supported many of the Iraqi paramilitary groups that helped defeat the Islamic State, also known as ISIS, in 2017. Iraqis still grew to resent Iran’s overweening influence in their country, not least because of the involvement of Iranian-backed militias in a brutal crackdown on anticorruption protesters in 2019 and 2020. Now, the tumult of recent months has further tilted Iraqis against Iran’s desire to make their country a staging ground of resistance to the United States and Israel. Leaders of political parties and militia groups that once hewed close to Tehran are pulling away.
In early June, fighters from Saraya al-Salam, a militia loyal to the Iraqi Shiite cleric Muqtada al-Sadr, gathered in the city of Samarra to hand over their weapons to the Iraqi government. That disarmament marked the group’s withdrawal from the Popular Mobilization Forces, a powerful umbrella coalition of mostly Shiite militias that exists at once inside and outside the Iraqi state. Saraya al-Salam’s thousands of fighters were the first to pull out of the alliance, and they have not been the last: Asaib Ahl al-Haq, a powerful Iranian-backed militia, announced that it, too, would leave the PMF.
Several prominent Iranian-backed militias remain doggedly committed to advancing Tehran’s interests in Iraq and the wider region. But the splintering of the PMF is a real blow to Iran. The so-called axis of resistance, Iran’s network of proxies across the region, has been badly damaged since Hamas’s October 7, 2023, attacks on Israel and Israel’s subsequent campaigns in Gaza and Lebanon. But in Iraq, the Iranian-aligned militias had largely stayed out of the fight and maintained their strength and standing. That position is now unraveling; Iran’s allied militias are being pushed toward the margins of Iraqi politics. And as Tehran’s hold loosens, Iraq glimpses a tantalizing future—one in which it might set its own path, free from the direction of the Islamic Republic.
 
MONOPOLY ON VIOLENCE
Before Israeli and U.S. forces attacked Iran in February, the Iraqi government pursued a determined, albeit increasingly strained policy: to balance between Washington and Tehran, maintaining ties with both while staying out of their confrontations. The fighting that followed the launch of Operation Epic Fury, however, made that posture impossible. Iraq became a theater of operations as Iran and Iranian-backed forces struck U.S. positions inside the country; diplomatic missions belonging to the United Arab Emirates and the United States; and Iraqi security, energy, and civilian infrastructure, particularly in the autonomous region of Iraqi Kurdistan. They also carried out strikes from Iraqi soil against targets in nearby Gulf countries. The United States retaliated against the Iranian-backed militias in Iraq, with the Iraqi government watching like a bystander. Baghdad was finally forced to face a question it had long avoided: Who controls the use of force within Iraq’s borders?
Over the past decade, Iraq had allowed Iranian-aligned groups to take over many functions of the state. The PMF was formally integrated into Iraq’s defense system in 2016. On paper, it is meant to report to the Iraqi prime minister, the country’s commander in chief. In practice, those factions retained their own chains of command and loyalties, often to Tehran. The Baghdad government allowed the militias to claim the resources of the Iraqi state and the legitimacy of being the state’s representatives even as those very militias denied the state the monopoly on force that would make it sovereign.
A newly formed government under Prime Minister Ali al-Zaidi, whose selection in May was endorsed by U.S. President Donald Trump, has made disarming the militias a priority. It has been able to encourage PMF actors to leave the coalition and integrate with the state. If these efforts gather further momentum, Baghdad may be able to rein in the Iranian-aligned militias and assert greater central control over paramilitary organizations.
Al-Sadr’s Saraya al-Salam has gone furthest, committing to full integration into the Iraqi armed forces. Many of the armed groups operating in Iraq today trace their lineage to Sadr’s movement and the insurgency he led against U.S. forces after 2003. His new willingness to have his forces incorporated into the state’s security services suggests the end of that era. Another PMF group—the Iranian-aligned Asaib Ahl al-Haq, led by the Shiite politician and paramilitary leader Qais al-Khazali—has also signaled its intention to disarm and place itself under the command of the Iraqi state. For both Khazali and Sadr, leaving the PMF and joining the state can be understood as part of an attempt to establish better relations not just with authorities in Baghdad but also with those in Washington.
To be sure, several important Iranian-aligned groups have refused to disarm and join with the Iraqi state. These include Kataib Hezbollah, Harakat al-Nujaba, and Kataib Sayyid al-Shuhada, key nodes in the axis of resistance in Iraq. They contend that Iraq remains under U.S. occupation and that they will surrender their weapons only when American forces leave the country. But their defiance is leaving them isolated. As other groups integrate with the Iraqi state, the holdouts look less like a national vanguard than an outlier defending the interests of a foreign power.
 
A CAUSE WITHOUT REBELS
Iran’s influence in Iraq has rested on two pillars: the hard power of its allied militias and a deeper embedding in Iraqi society and politics. It is the second, more than the first, that has given Tehran its staying power. And it is this second pillar that has begun to crumble.
A decade ago, Iranian-backed armed groups in Iraq fought alongside the Iraqi military against ISIS. This was a very popular move that translated into votes for their political proxies in the 2018 parliamentary elections. Since then, however, their popularity has waned. In October 2019, for instance, they helped violently suppress the anticorruption protests, in which hundreds of civilians died; after Operation Epic Fury began on February 28, their strikes across the country and the region sought to pull Iraq directly into Iran’s war. This was so unpopular that even Iraq’s Shiite clerical establishment, which has deep religious ties to Iran and broadly opposes the U.S.-Israeli campaign, distanced itself from the war: Iraq’s highest Shiite religious authorities in Najaf refused to call on Iraqis to support Iran against the United States and Israel, appealing to international law and stopping short of issuing a religious summons to fight for Iran. However close the bonds with Iran, the clerics suggested, Iraq came first.
The Iranian-backed militias are not about to disband wholesale. As long as the Islamic Republic endures, it will keep supporting its Iraqi proxies and allies and maintain operatives in the country. It will not surrender its position in Iraq, since it has already seen its major allies in the region defenestrated or gravely weakened: in 2024, Bashar al-Assad’s regime in Syria collapsed, and Hezbollah in Lebanon has been enfeebled after several bruising rounds of fighting with Israel. For its part, Iraq is unlikely to force a sweeping disarmament of the Iranian-aligned militias. Such a move would almost certainly precipitate intra-Shiite fighting, which no government of this Shiite-majority country wants to risk.
But the balance of power in Iraq has shifted. Although Tehran wants to see its position in Iraq strengthened by the emerging postwar order, it is the authority of the Iraqi state, not Iran’s network, that is advancing. The consequences of that reversal, should it hold, are real. An Iraq in which the state wrests power from the militias would not become anti-Iranian, but it would loosen Tehran’s grip on it. That would allow Iraq to integrate more with the Arab Gulf and the wider region, including by weaning itself from Iranian gas and electricity and by linking with Jordanian and Gulf power grids—and would enable Iraq to better distance itself from the confrontations Iran pursues with the United States and Israel.
This transformation also signals the further weakening of the axis of resistance. Iranian-aligned and Iranian-backed militias may remain active in the country, but their standing is diminished. Iraq will not serve as an arena for the projection of Iranian power in the region, as it has in recent decades. Whatever Iran has gained from its fight with Israel and the United States, it has ceded ground in Iraq.
Iran has been here before. It lost its dominant position in Syria after years of using sectarian militias to prop up a brutal regime that left it deeply unpopular among Syrians. By pursuing its own military aims through a reluctant host and failing to read the warning signs, Iran is repeating the error in Iraq. If, for instance, the current bout of renewed fighting spreads to Iraq, Iran’s allies in Iraq could become active again and attack targets around the region. Doing so would once more expose Iraq to a war most Iraqis, including Shiites, want no part of, deepening resentment toward Iran. Iraq’s Shiite elites are increasingly putting their political and economic interests ahead of the cause of permanent resistance against the United States. Even if Iran survives the war, its position in Iraq may not.