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Iraq’s most important external partners, Iran and the United States, as well as Iraq’s domestic politicians, are competing to consolidate their leverage ahead of the US-Iraq Strategic Dialogue set to begin on June 11. Iran dispatched its IRGC-Quds Force Commander and energy minister to solidify a key energy deal that the United States had hoped to deter by encouraging partnerships with Gulf States. Iran’s proxies in Iraq responded by opposing the US-encouraged outreach to Saudi Arabia and attempting to form a parliamentary mechanism to demand the expulsion of US forces from the country. Meanwhile, Iraqi Prime Minister Mustafa al-Kadhimi has strengthened his domestic position by filling key vacant security roles, passing a full cabinet, and forming an alliance in Parliament to support his actions in order to navigate the competing demands on his country in the Strategic Dialogue. The pursuit of leverage by all actors indicates each expects their stance in the Strategic Dialogue negotiations to be met with resistance.

Economic and diplomatic competition between the United States and Iran is ramping up as both sides attempt to control the conditions leading up to the US-Iraq Strategic Dialogue in mid-June. Iran seeks to ensure that Iraq continues to import Iranian energy, a key economic driver for Iran's sanctions-battered economy. Iraq relies on those imports to bolster its under-funded, often-strained electrical grid. The United States is aiming to reduce Iraqi reliance on Iranian imports by encouraging investments by US and allied companies and leveraging its sanctions waivers. Meanwhile, Iraqi Prime Minister Mustafa al-Kadhimi is capitalizing on what appears to be a grace period granted to him by the United States and Iran to work with both sides and secure Iraq’s energy and defense requirements.

Prime Minister Mustafa al-Kadhimi is seeking to develop closer energy relationships with Iraq’s Gulf neighbors, particularly Saudi Arabia, to demonstrate to the United States that Iraq is making progress in divesting from Iranian energy reliance and renewing relations with all of its neighbors before the June US-Iraq Strategic Dialogue.

New Iraqi Prime Minister Mustafa al-Kadhimi seeks to balance a variety of opposing forces in Iraq. After a week of executive orders and appointments generally viewed as favorable to the United States, Kadhimi called the Iranian-dominated Popular Mobilization Forces (PMF) heroes who are essential to the anti-ISIS fight in a visit to PMF headquarters. Kadhimi needs to maintain his ties with the PMF and Iran’s proxies in Iraq to prevent militia-led civil unrest and ultimately state collapse. However, Kadhimi also made a point of showcasing his leverage over the PMF by bringing with him the leaders of militias that defected from the PMF in April. Those defections threatened to fracture the PMF and offended the organization’s leadership which remains under Iranian, rather than Iraqi, government control. Iran continues to work to demonstrate its influence over Iraqi affairs in other areas; the Iranian ambassador told Iranian media that Kadhimi asked for financial aid from Iran and said that Iraq remains “dependent” on Iran for financial support despite US pressure to sever those ties.