EASTORA REPORT | Baghdad is negotiating with Washington to keep its oil flowing and reportedly threatening to arrest armed groups if they...

EASTORA REPORT | Baghdad is negotiating with Washington to keep its oil flowing and reportedly threatening to arrest armed groups if they fight for Iran. For Iraq’s leaders, both moves risk dividing the coalition that keeps them in power.

Foreign Minister Fuad Hussein told Al Jazeera that the U.S. Treasury had demanded closure of every Iraq-Iran border crossing except two. Baghdad is still negotiating, he said, warning that closures would hurt its economy. The demand has not been accepted.

Hussein also described an arrangement with Washington and Tehran allowing Iraqi oil through the Strait of Hormuz along a shipping lane near Oman. He estimated that the war and disruption to exports had cost Iraq $60 billion. Keeping oil moving has become urgent.

A sharper dispute is unfolding inside Baghdad. According to the newspaper Al-Mada, Prime Minister Ali al-Zaidi warned leaders of the Shiite Coordination Framework that factions joining another U.S.-Iran war would face arrest. The account rests on unnamed sources, not a public statement.

Militia leader Qais al-Khazali reportedly said armed groups might enter a prolonged war. Shiite politician Humam Hamoudi warned that arrests could bring down both the government and the alliance behind it.

At the same closed meeting, Al-Mada reported, al-Zaidi described alleged leaked U.S. war scenarios: an invasion of southern Iran through Iraq and possible Iranian pressure on Baghdad to enter Kuwait through Basra. Neither has been independently confirmed.

Washington’s demands collide with Iraq’s political realities. Iran retains influence through parties and armed factions linked to the ruling coalition. The United States has economic and security leverage, while trade with Iran makes sweeping border closures costly.

Hussein said Baghdad welcomes friendship with Tehran but rejects interference. The government is accommodating Washington on oil access and confronting militias over war, yet has not agreed to close most border crossings.

If al-Zaidi follows through on arrests, he risks a confrontation with his allies. If he cannot restrain the factions, he risks one with Washington.