Iraq’s Foreign Policy:
Between Domestic Fragmentation and the Search for National Sovereignty
This policy note explores Iraq’s multifaceted response to the ongoing regional upheaval, examines the role and agency of non-state actors, and evaluates the broader strategic challenges confronting Iraq as the Middle East crisis continues to unfold.
The recent assault on the Kurdistan Region’s Khormor gas facility highlights the extent to which Iraq’s foreign policy is hindered by deep internal fragmentation and external entanglements. Domestically, deep rifts between Shi’a, Sunni, and Kurdish factions persist, while Iran-backed non-state actors (NSAs) continue to erode state authority and undermining Baghdad’s diplomatic coherence.
The Government of Iraq (GoI) has sought to maintain a position of neutrality amid escalating regional conflicts. Nonetheless, some armed NSAs launched attacks on US assets during earlier phases of the crisis. They refrained from directly engaging Israel during the 12-Day War, temporarily aligning with Baghdad’s de-escalation strategy, only to resume attacks recently on US, Iraqi and Kurdistan Region’s targets inside the country.
Iraq continues to balance strategic relations with regional and global powers while managing economic dependencies and limited security capacity. Repeated violations of Iraqi sovereignty by external actors underscore the government’s insufficient control over national territory. Unless Baghdad can reassert authority over NSAs and implement meaningful political reform, Iraq will remain reactive and vulnerable, more a battleground for others than a sovereign actor in its own right.
Fragmented Sovereignty and the Limits of Foreign Policy
While the federal Government of Iraq (GoI) is formally responsible for foreign policy and national security, its authority remains persistently undermined by a dense network of sectarian parties, armed groups, and transnational loyalties. Similarly, Iraq’s sovereignty remains contested, both internally by rival security actors, and externally by regional and global powers.
Since the regional escalation of conflict that began on 7 October 2023, Iraq’s foreign policy has increasingly reflected its internal fractures. Prime Minister Mohammed Shia al-Sudani has attempted to maintain a stance of neutrality amid intensifying regional tensions, a posture that might be described as ‘guarded neutrality’. However, this position has been repeatedly tested by powerful non-state actors (NSAs). Hard-line factions within the Popular Mobilisation Forces (PMF), such as Kata’ib Hizbollah and Harakat Al-Nujaba, both ideologically and operationally aligned with Tehran, have carried out missile and drone attacks on US targets and expressed vocal support for Hamas and Hizbollah in their confrontations with Israel.
These actions risk drawing Iraq into broader regional conflicts and exposing it to retaliatory strikes, often without government approval or coordination. As a result, Iraq’s foreign policy appears less the outcome of strategic planning than a reflection of fragmented authority and shifting domestic power dynamics. During the June 2025 Iran-Israel war, however, these same factions showed rare restraint. By avoiding direct attacks on US or Israeli interests, they aligned – at least temporarily – with the government’s de-escalation strategy. This anomaly shielded Iraq from becoming a battleground in the confrontation but also underscored the volatility of militia behaviour and the fragility of the government’s authority.
Internal Power Dynamics: A Fractured Political Landscape
Iraq’s internal political order remains deeply fragmented. Although Shi’a parties dominate the executive, legislative, and judicial branches, the Shi’a political sphere itself is divided. Meanwhile, PMF factions, though nominally integrated into the state since 2016, retain considerable autonomy, operating parallel military, intelligence, economic and political structures that inevitably dilute Baghdad’s control over governance and state policy.
These dynamics weaken the state’s monopoly on force and leave the country vulnerable to regional proxy conflicts. While some PMF factions advocate for greater alignment with the state policy, others prioritise ideological loyalty to the Iran-led Axis of Resistance (AoR) over national governance. Their unilateral actions frequently draw Iraq close to regional confrontations, eroding diplomatic credibility and undermining national unity.
Sunni political actors, historically marginalised since 2003, are deeply fragmented, rendered ineffective and lack a coherent common vision. Some Sunni leaders are gradually regaining influence in western Iraq, ostensibly backed by Gulf states and Turkey, and seek to counterbalance Iranian influence by challenging PMF control in Sunni-majority areas.
Kurdish parties continue to exercise autonomy in the Kurdistan Region, including in matters of foreign and security policy, though internal Kurdish rivalries limit their collective impact at the federal level. Relations between the Kurdish political actors with Shiites vary considerably while tensions between Baghdad and Erbil remain over a range of unresolved constitutional issues. Taken together, these overlapping fractures hinder the development of a coherent foreign policy, leaving Iraq susceptible to internal fragility and regional shocks, and vulnerable to external manipulation.
Strategic Dilemmas and Diplomatic Constraints
Iraq possesses modest but meaningful diplomatic potential. Baghdad has previously hosted pivotal mediation efforts, most notably the Iran-Saudi dialogue and the successful organisation of recent Arab Summits. It could serve again as a venue for broader regional de-escalation. However, this potential is constrained by its fragmented domestic sovereignty and the persistent influence of external powers operating through entrenched local proxies.
The government’s strategic calculus is defined by three core priorities: maintaining internal stability, safeguarding economic lifelines and infrastructure development, and avoiding entanglement in regional hostilities. Yet each of these goals is increasingly difficult to sustain. Any perceived tilt toward Tehran risks alienating Western partners and threatening critical economic and security cooperation. Conversely, distancing from Iran could provoke backlash from powerful militias and further destabilise the security environment.
In recent years, AoR-aligned groups have grown increasingly assertive. They have called for the expulsion of US forces, opposed maritime agreements such as the 2012 Khor Abdullah accord with Kuwait, and rejected any normalisation with Syria’s new Sunni-Islamist regime. These factions have also antagonised regional actors, including Jordan and Gulf countries, particularly in response to interceptions of Iranian missiles or diplomatic overtures toward Israel. Militarily, some AoR factions have reportedly sabotaged Iraqi radar systems, at locations such as Camp Taji and Imam Ali Base, and launched attacks on Kurdish Peshmerga forces for unclear reasons. Their threats of unilateral action against foreign and national targets further elevate the risk of Iraq becoming a battlefield for regional reprisals. Iraq’s inadequate air defence systems only heighten this vulnerability.
Economic Fragility and the Governance Conundrum
Iraq’s economy remains acutely sensitive to regional turbulence. The country depends on oil exports, trade routes through the Gulf, electricity imports from Iran, and US military support for counterterrorism. Any disruption, such as in the Strait of Hormuz or near critical infrastructure in the south, could derail reconstruction efforts, deter investment, and exacerbate fiscal instability.
In keeping with his predecessors, Prime Minister Al-Sudani faces a delicate balancing act. He must manage a parliament dominated by fractious alliances, placate powerful non-state actors, and preserve strategic ties with foreign partners, all while navigating a crisis-prone region. The GoI’s capacity to implement coherent policy is further weakened by institutional fragmentation and contested legitimacy, which limits its ability to respond decisively to both domestic and international crises.
Proxy Competition and External Influence
Regional powers, particularly Iran, Turkey, and the Gulf states, continue to shape Iraq’s internal and external behaviour. Iran maintains the deepest footprint, supporting Shi’a armed groups, cultivating religious institutions, and leveraging media and cultural networks to maintain influence. For Tehran, Iraq remains a critical buffer zone in its confrontation with the US and Israel.
Turkey, meanwhile, justifies its military presence in Kurdistan Region through anti-PKK operations and supports Sunni and Turkmen actors in other parts of Iraq, particularly in Kirkuk and Nineveh. Gulf states, although less militarily involved, utilise economic engagement and tribal networks to counter Iranian dominance and influence political developments.
These layered influences further erode Baghdad’s sovereignty and complicate foreign policymaking. While Iraq remains closely tied to Iran in the energy and internal security sectors, growing nationalist and clerical dissent, especially among Najaf-based religious authorities, could drive efforts to rebalance these relationships. Yet a sudden weakening of Iran’s influence may produce a destabilising vacuum, prompting militia backlash and new cycles of internal contestation.
US-Iraq cooperation, particularly in counterterrorism, remains essential but increasingly strained. Frequent attacks on US assets by Iraqi militias have sparked debates in Washington over the future of the American presence. A complete withdrawal could accelerate Iraq’s descent into deeper proxy entanglement and further empower non-state actors.
Iraq’s “Partial Impartiality” in the Iran-Israel Conflict
Since the outbreak of the Gaza war in October 2023, Iraq has attempted to maintain a position of biased neutrality. However, the GoI officially condemned Israeli operations in Gaza and advocated for a ceasefire, while refraining from direct military involvement. Baghdad positioned itself as a mediator during Arab-Islamic summits, seeking to de-escalate tensions.
In contrast, AoR-affiliated militias voiced solidarity with Hamas and launched sporadic attacks against US bases in Iraq and Syria, citing American support for Israel. These actions, conducted without state consent, directly challenged the GoI’s policy and exposed Iraq to retaliatory risks.
Following Israel’s targeting of Hizbollah, Baghdad again urged de-escalation and emphasised humanitarian concerns, while several AoR-affiliated militias threatened to intervene. Their rhetoric, coupled with logistical support to Lebanese fronts, strained Iraq’s diplomatic standing with Western allies.
Remarkably, during the June 2025 12-Day War, the GoI managed to prevent Iraqi territory from being used as a launchpad and successfully kept AoR groups from engaging directly. While Iraq’s airspace was violated by all parties, including Iran, Israel, and the US, the central government’s combination of backchannel diplomacy and internal political pressure preserved a delicate neutrality.
Still, this neutrality required rhetorical alignment with Iran. Government spokesman Bassem al-Awadi condemned Israel’s offensive of 13 June as a violation of international law, and criticised the subsequent US strike on Iranian nuclear facilities. While this language appeased domestic constituencies, it risked alienating Western partners and underscored Iraq’s diplomatic tightrope.
Conclusion: Reclaiming Strategic Agency in a Fragmented State
Iraq’s foreign policy remains at the mercy of both internal power struggles and regional geopolitics. It will remain constrained as long as internal sovereignty is contested and NSAs retain operational autonomy. The tension between formal neutrality and informal bias towards Iran encapsulates the dilemmas facing the incumbent, and future, governments.
The recent direct and indirect Israel-Iranian confrontations have all underscored Iraq’s vulnerability. If regional conflict continues to escalate, Iraq risks becoming a permanent theatre for proxy warfare, its territory used for strategic signalling by actors beyond its control. Conversely, a regional de-escalation, particularly between Iran and the US, could offer Baghdad a narrow window of opportunity to reassert its central authority, integrate cooperative PMF elements, and recalibrate its foreign policy toward a more balanced pragmatism.
But without deeper political reform, institutional consolidation, and a reconfiguration of civil-military relations, Iraq’s foreign policy will remain reactive, fragmented, and vulnerable to external pressures. Only by addressing the crisis of internal sovereignty can Baghdad reclaim its place as a strategic actor, rather than a passive arena, in regional geopolitics.
In short, the challenge ahead is clear: if Iraq is to preserve its sovereignty and play a constructive regional role, it must resolve the fundamental contradiction between a state-based foreign policy and the actions of NSA serving external agendas. Strengthening state institutions, enforcing a monopoly on force, and carefully navigating foreign partnerships will be crucial to ensuring that Iraq does not become a casualty or a conduit of another generation of regional warfare.
Firs published by Konrad Adenauer Stiftung’s Jordan Office in October 2025