Published on: 2025-10-28

Intelligence Report: Iraq’s Dangerous Deal With Iran – The Atlantic

1. BLUF (Bottom Line Up Front)

The most supported hypothesis is that Iraq’s current political and economic trajectory is increasingly influenced by Iranian-backed entities, posing a strategic risk to regional stability and U.S. interests. Confidence level: Moderate. Recommended action: Increase diplomatic engagement with Iraq to counterbalance Iranian influence and support anti-corruption measures.

2. Competing Hypotheses

Hypothesis 1: Iraq is becoming a strategic ally of Iran, with Iranian-backed militias gaining significant political and economic power, potentially destabilizing the region.
Hypothesis 2: Iraq is leveraging its relationship with Iran to maintain internal stability and economic growth, using Iranian influence as a counterbalance to Western pressures, without fully aligning with Iranian geopolitical goals.

3. Key Assumptions and Red Flags

Assumptions:
– Iraq’s economic growth is heavily reliant on Iranian-backed entities.
– The Iraqi government is unable to control corruption and militia influence independently.

Red Flags:
– The rapid increase in Iranian-backed militia contracts and influence.
– High levels of corruption and theft within the Iraqi government.
– Potential bias in interpreting Iraq’s actions as solely pro-Iranian without considering internal political dynamics.

4. Implications and Strategic Risks

The increasing influence of Iranian-backed militias in Iraq could lead to:
– Heightened regional tensions, particularly with U.S. and Israeli interests.
– Economic instability if corruption continues unchecked, potentially leading to civil unrest.
– Cybersecurity threats if Iranian influence extends to critical infrastructure like the fiber optic grid.
– A shift in Iraq’s geopolitical alignment, reducing Western influence in the region.

5. Recommendations and Outlook

• Enhance intelligence sharing with Iraqi counterparts to identify and mitigate Iranian influence.
• Support anti-corruption initiatives and economic reforms in Iraq to reduce dependency on Iranian-backed entities.
• Scenario Projections:
  • Best Case: Iraq stabilizes economically and politically, reducing Iranian influence through diversified international partnerships.
  • Worst Case: Iraq becomes a proxy battleground for Iran-U.S. tensions, leading to increased violence and regional instability.
  • Most Likely: Continued Iranian influence with periodic internal unrest due to economic and political dissatisfaction.

6. Key Individuals and Entities

– Mohammad Shia al-Sudani
– Popular Mobilization Forces
– Muhandis General Company

7. Thematic Tags

national security threats, regional focus, geopolitical dynamics, economic instability