As many of the Middle East’s geopolitical heavyweights look to bury past grievances and establish stronger ties, Iraq has made an ostensible shift towards the Gulf Cooperation Council (GCC), while opposition towards Iran’s traditional influence brews within the country. Prime Minister Mustapha Al-Kadhimi’s government appears to distance itself from its predecessors and relinquish foreign interference in the country, even as it contends with a crippling economic and electricity crisis.

At the Iraqi-Saudi Trade Forum in Riyadh on January 24, secretary of the Iraqi cabinet Hamid Al-Ghazzi announced that both Riyadh and Baghdad “are working on several issues, including connection of the electricity grids and the development of industrial cities.”

The following day, Al-Ghazzi and the Saudi energy minister Amir Abdulaziz bin Salman signed a memorandum of understanding (MoU) between their two countries, with both ministers agreeing to connect their power grids. Iraq’s acting electricity minister, Adel Karim, said the grid connection will be completed within two years.

A Shift Within the Gulf

Saudi Arabian and Iraqi relations were sour under Saddam Hussein’s regime post-1991 Gulf War. Their relationship took another harsh turn in the wake of the 2003 US-led invasion against Hussein, and subsequent Iran’s hegemony in the country. Then-king Abdullah of Saudi Arabia had a complete distrust of former Prime Minister Nouri Al-Malaki and his apparent closeness with Tehran. Thus, Riyadh largely refused to engage with Baghdad.

However, the coupling of Al-Kadhimi’s growing opposition towards Iranian sway in the country, and Saudi Crown Prince Mohammad bin Salman’s attempts to reform Saudi Arabia’s domestic and foreign policy – including a potential rapprochement with Tehran – has meant that these past differences no longer stand.

Gulf states have worked to strengthen ties with Iraq and offer a helping hand amid its economic woes.

Along with Saudi Arabia’s growing ties with Baghdad, other Gulf states with traditionally frosty relations with Tehran – and therefore Baghdad ­– have worked to strengthen ties with Iraq and have offered a helping hand amid its economic woes.

Karim held talks with Qatar’s Energy Minister Saad Al-Kaabi to discuss the prospect of Doha exporting gas to improve Iraq’s power shortages, on February 7. Two days later, Karim announced that Iraq would prepare to import Qatari gas by the summer of 2023, which would partly replace the energy supply coming from Iran.

“Importing the gas includes building the infrastructure and this will take at least a year to 15 months, depending on the agreement. This needs to happen because Iraq cannot continue to rely on one source for gas,” said the electricity minister.

While Riyadh and Doha pursue the revival of Iraq’s lackluster energy sector, the United Arab Emirates (UAE) has also made various agreements with Iraq to boost bilateral ties and offer its own investments.

Al-Kadhimi met with Abu Dhabi Crown Prince Mohammed bin Zayed in the Emirati capital in May 2021, which resulted in Abu Dhabi pledging a $3 billion investment in Iraq to strengthen both countries’ economic partnership and accelerate Iraqi growth.

Later, in October, the UAE Ministry of Finance and Iraq’s National Investment Commission signed an accord to boost foreign investment between both countries and protect past and future ventures from various restrictions including nationalization, confiscation, judicial seizures, and asset freezing. That month, Emirati energy company Masdar also signed a deal with Iraq’s Ministry of Electricity and National Investment Commission to build five power stations across Iraq.

UAE Ministry of Finance and Iraq’s National Investment Commission signed an accord to boost foreign investment.

Despite renewed tensions between Abu Dhabi and Tehran following the escalation of the war in Yemen and the UAE’s shift towards Israel, the UAE has still tried to adopt a more pragmatic foreign policy. Its desire to increase investment in Iraq is a by-product of this.

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Decreasing Iranian Influence

A key factor in Iraq’s fledging warmth to the GCC is Iran’s declining power in Iraq, namely after Tehran, announced in December that it would stop supplying gas and power to Iraq – largely due to its own limited capabilities. However, Tehran’s decision also follows growing Iraqi opposition to its meddling in the country.

After the 2003 invasion, Iran-backed militias exploited the vacuum and helped Tehran gain a foothold in Iraq’s parliament. At the time, Iran feared it could be the next target of a US invasion in the wake of Washington’s expeditions in Iraq and Afghanistan, which propelled Tehran to strengthen its own Middle Eastern clout.

The fight against extremist factions, namely the Islamic State (also known as IS, ISIL, ISIS, and Daesh), helped Tehran further expand its presence in Iraq as the Popular Mobilization Forces (PMF) – an umbrella group of Iran-sponsored factions, collaborated with the Iraqi army to fight the terrorist group.

Tehran’s presence in Iraq has since faced many challenges.

Tehran’s presence in Iraq has since faced many challenges, from the Trump-sanctioned killing of Iranian general Qassem Soleimani in January 2020 to widespread protests in October 2019 against the Iran-aligned administration. Donald Trump’s “maximum pressure” campaign on Iran, which involved tightening sanctions, seems also to have been a crucial factor in weakening Tehran’s sway in the country.

Ordinary Iraqis have expressed their contempt for the Iranian militias dominating the country. A poll by the Baghdad-based Independent Institute of Administration and Civil Society Studies (IIACSS) showed that just 15 percent of Iraq’s citizens had a positive view of Iran in 2020. A substantial decline from the 70 percent who expressed a favorable attitude in 2017.

However, growing GCC influence in Iraq may trigger further geopolitical strife. As Muhammad Jawad Adib noted in Al-Monitor, some pro-Iranian politicians have criticized Saudi Arabia and Iraq’s initiative to connect both countries’ power grids, suggesting potential Iran’s opposition to the move.

Furthermore, on February 2, an obscure Iraqi militia with apparent Iranian ties, Alwiyat al-Waad al-Haq (“The True Promise Brigades”) claimed responsibility for a drone attack on Abu Dhabi, following a more severe raid on the city from Yemen’s Iran-backed Houthi rebels.

Analysts argued the latest attack was “a message from Iran,” while prominent Iraqi Shia cleric Moqtada Al-Sadr warned the move could spark a “dangerous regional war.”

Could a Lasting Shift Occur?

Despite these recent GCC overtures, Iraq has other Arab partners to choose from in terms of energy relations – such as Jordan and Egypt. Rather than being entirely dependent on Gulf states, Baghdad wants to pursue a more independent foreign policy with the aim of alleviating its economic crisis.

Iraqi Prime Minister Al-Kadhimi foresees a new independent Iraq that is free from all foreign involvement.

Importantly, Al-Kadhimi has denounced the US military presence in Iraq, rather than solely taking aim at Tehran, showing he foresees a new independent Iraq that is free from all foreign involvement. Indeed, this would be crucial to maintain support from the Iraqi population and ensure the longevity of his premiership.

But it’s not just GCC states that strive to cozy up to Baghdad. In recent years, China has also engaged in talks with Iraq on developing and reconstructing Baghdad’s oil infrastructure. France has eyed up Iraq’s oil fields, too, per its attempts to ramp up its soft power and influence in the Middle East.

Whether Baghdad’s new partners can help ease its many domestic woes and replace Tehran’s hegemony is uncertain. Particularly as Iran’s militias still boast a strong presence in the country. Furthermore, a long timeframe would be needed for investors to develop the infrastructure needed to create lasting change after years of civil war turmoil.

What is clear, is that Iraq is trying to rebrand itself and move away from its traditional dependence on Tehran, and the GCC states have a new opportunity to capitalize on this.