Why are Iran and Iraq geopolitically entangled?

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This is the script for my video posted on August 31, 2026. Watch it on TikTok.

You might not realize it, but Iraq and Iran share a lot more than just similar names. They are so geopolitically intertwined that it is very difficult to talk about one without eventually needing to talk about the other. But other than being neighbors, why are Iraq and Iran so tethered together?

The most foundational differences between Iraq and Iran are ethnic and linguistic. Before the Arab conquest of Mesopotamia in the 7th century CE, Iraq was ethnically and linguistically diverse, inhabited by a combination of Aramaic-speaking indigenous peoples, pre-Islamic Arab tribes, and Persians.

But the forces of the Rashidun Caliphate conquered land from modern Libya to the Caucasus to the Iranian plateau, with later caliphs pushing on toward modern Pakistan. Persia was conquered too, but it kept its distinctive ethnic and linguistic composition, while Iraq gradually became predominantly Arab and Arabic-speaking over the following centuries.

Then in the 16th century, the Ottoman Empire conquered most of Iraq under Sultan Suleiman the Magnificent, but they never conquered the Persian heartland. After more than a century of intermittent war, the Ottomans signed the Treaty of Zuhab in 1639, setting a border that later treaties would adjust but never fundamentally move, with Iraq in Ottoman hands and Persia retained by the Safavids.

Despite this, the lines between Iraq and Iran have always been blurry, in part because of the terrain, with the rugged Zagros mountains in the north and marshland in the south making for a long and porous border, but also because of religion. Iran famously practices Shia Islam, but many don’t realize Iraq is a majority Shia country too, at about 60-65%.

This plays into their dynamics because while Iran is in many ways the center of the Shia world, Shia authorities are divided across borders, with the Sistani school of thought based in the Iraqi city of Najaf while Iran's clerical establishment radiates from the seminaries of Qom and the Supreme Leader in Tehran. They have fundamentally differing views on governance, the authority of clerics, and the Islamic republic, and Shias in Iraq typically align with the Najaf school of thought.

For the most part, Iraq and Iran have historically fought over territory though. Under the 1937 Boundary Treaty, the two countries set their southeastern border along the Iranian bank of the Shatt al-Arab, handing Iraq control of nearly the whole waterway, which is Iraq's only real sea outlet and an artery for oil exports from both sides. But in 1969 Iran abrogated the treaty, arguing they’d signed it under duress and pressure from Britain, which was heavily involved in the oil industry in both countries and had interests of its own.

Border clashes followed, but in 1975 Iran’s Shah and Iraq’s Vice President Saddam Hussein signed the Algiers Agreement to set the border at the deepest channel of the waterway in exchange for Iran ending its support for the Iraqi Kurdish rebellion, which promptly collapsed.

Of course, in 1979 a broad revolution toppled the Shah, and Ayatollah Ruhollah Khomeini's hardline Shia clerics consolidated it into an Islamic republic. Saddam Hussein was afraid of the revolution spreading into Iraq and wanted to capitalize on the disorder to seize oil-rich lands and reverse the concessions he’d made, so he abrogated the Algiers Agreement, and the Iran-Iraq War began.

Over the course of eight years, up to a million people were killed, including Iranians and Kurds hit by Iraqi nerve agents and mustard gas that the US initially, and incorrectly, blamed on Iran. Iraq attacked tankers carrying Iranian oil, Iran hit back against Kuwaiti and Gulf shipping, and it was those attacks on Kuwait that pulled in the US Navy and made it a conflict of international relevance. The US, the Gulf states, and many others supported Iraq despite their use of illegal weapons, and the ceasefire framework they established took hold in 1988, ending the war.

But the war made the Iranian regime realize that it was highly vulnerable, and that even when its enemies committed war crimes, it would not receive the support it needed from other countries. That hardened a conviction that Iran had to fight its enemies far from home, and that rationale runs through its whole network of allied militias, from Hezbollah, which Iran helped build in Lebanon in 1982 while the war was still going, to the Houthis in Yemen, who it armed decades later. This doctrine of forward defense gave it the strategic depth and asymmetric influence it needed to defend itself.

I mentioned earlier that Iraq is a majority Shia country, and this became extremely dangerous to Saddam Hussein during the Gulf War of 1990 and 1991. Iraq invaded Kuwait partly because it owed about 14b USD to the country thanks to the war against Iran and Kuwait refused to forgive it, but also because it accused Kuwait of overproducing oil to crush prices, of siphoning crude oil from a shared field, and because it wanted Kuwait's islands for better access to the Gulf.

But the failed invasion created a rare opportunity for Shias in the south and Kurds in the north to rise up, in a largely spontaneous revolt of army deserters and local fighters that Iran-backed groups joined. Despite having taken serious losses, Iraqi forces crushed the southern Intifada uprising as the US stood aside, though the US later shielded the Kurdish north with a no-fly zone.

It’s important to understand that from the early days of the Islamic Republic of Iran, the regime had been funding revolutionary forces in Iraq. The Supreme Council for Islamic Revolution in Iraq was founded in 1982, and its Badr Corps was directly armed, funded, and often led by Iran.

So when the US invaded Iraq in 2003, these Shia-Islamist forces were able to become Iraq’s ruling class. The removal of Saddam Hussein and his allies gave Tehran substantial influence on the country and allowed them to build and coordinate enormous militias and fund the Shia fighters attacking US forces. So Iraq was divided between US-aligned forces and Iran-aligned forces, and this in turn allowed other forces to exploit the turmoil and rise to power.

There’s obviously a lot more to this than I can cover here, but as you can see, Iraq and Iran have some very complex history together. But it’s not all conflict. Neighbors like this inevitably find ways to compromise too.

By Iran's own customs figures, its non-oil exports to Iraq exploded from about 145m dollars in 2005 to nearly 12b dollars in 2024, or about 20% of its total. That makes Iraq the second largest market for Iran's non-oil exports, behind only China. Iraqi officials said in early 2025 that about 43% of the country's electricity was generated using Iranian natural gas, though that share has fallen as the US tightened sanctions waivers and Iran repeatedly cut supply, halting it entirely at the end of 2025 and forcing it to find an alternative source. Iraq also owes Iran billions in unpaid gas and electricity bills, with estimates running anywhere from around 2b dollars to over 10b.

Iran also exerts substantial influence on Iraqi domestic politics via the Iran-aligned Coordination Framework, or CF, a coalition that controlled the government under Prime Minister Mohammed Shia al-Sudani from 2022 on.

After the November 2025 election though, al-Sudani was passed over for a second term, and in early 2026 the CF put up Nouri al-Maliki as the candidate for prime minister instead. Then the US intervened, publicly threatening to cut off support and Iraq's access to US dollars if Maliki came back, and the CF fell back on a compromise candidate, a political outsider named Ali al-Zaidi. He was confirmed in May 2026 with his cabinet still only half filled, and he is now navigating the power struggle between the US and Iran as Prime Minister.

Since October 2023, Israel and the US have been working systematically to undermine Iran’s proxies in the region, and the Iranian government has been overwhelmingly focused on itself since the US first struck its nuclear sites in June 2025 and then joined a far larger war on Iran in early 2026. With Hezbollah, Hamas, and the Syrian regime all either dismantled or substantially degraded, Iran began relying on the Iraqi Popular Mobilization Forces, or PMF, as its most intact proxy, raising the strategic value of Iraq even as Iran’s economic leverage there declines.

A new law advanced in 2025 that would grant the PMF independent legal status and expanded powers in the country. Sunni and Kurdish MPs boycotted parliamentary sessions and even the CF was divided as the US pressured for militia disarmament instead and an end to financing the PMF, which the US views as a staunchly pro-Iran force. The bill stalled and got pushed to the next parliament. And the PMF isn't monolithic, since it grew out of a 2014 fatwa by Iraq's own Grand Ayatollah Sistani and includes shrine units loyal to Najaf alongside the hardline Iran-aligned factions that the US worries about.

See, Iraqi Kurdistan is a really distinct part of the country, in many ways a country of its own, and it generally has a very different relationship with Iran. While Sunnis and Kurds hold overwhelmingly negative views of Iran and Iraqi Shias are increasingly split on it, Iraqi Kurdistan relies heavily on cross border trade for goods, food, and fuel, mostly through Turkey but also through Iran. But the Kurdish north was a secondary front in the Iran-Iraq War and the site of Saddam's Anfal campaign and the Halabja gas attack, so many there have a complex relationship with Iran.

Iraq serves as an economic cushion for Iran and a conduit for laundering US dollars and oil, making it a direct front in the conflict between Iran and the US. It may seem to many like Iraq is no longer a key player on the world stage, but this is simply untrue. Iraq’s relationship with Iran means that we have to keep up on its affairs to have a clear view on global geopolitics.

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