Just days after American and Israeli forces eliminated Ayatollah Ali Khamenei and sparked broader regional fighting, unmanned aircraft appeared above Basra in southern Iraq. Their targets included the nation's petroleum facilities. Strikes damaged a BP-run oilfield along with a shipping hub at Basra airport and a sizable complex hosting overseas firms that support energy operations. A follow-up assault on 6 March struck the same site, damaging offices and storage areas used by Halliburton and KBR, American firms active in Iraq since the 2003 conflict. The resulting blaze illuminated the evening sky.

Though minor in the larger conflict, these incidents in Iraq revealed the state's profound frailty and the ease with which its authority could be breached, according to a top security figure. For four decades the United States, Iran and Israel maintained a tense standoff short of outright peace or war. That arrangement has now unraveled abruptly, leaving Iraq squeezed between the sides.

Additional assaults on energy sites followed. On 11 March an Iranian unmanned vessel struck two tankers near Basra port, igniting fires and killing at least one sailor. Over subsequent weeks further drone hits targeted additional foreign-operated fields. Hundreds of energy workers from American, European and Chinese firms departed, many by road due to closed airspace. Thousands of local employees were furloughed.

Responsibility went unclaimed in most cases, except for the tanker strikes acknowledged by Iran. Baghdad and Basra officials issued only vague remarks on sovereignty and probes. In truth many attacks originated not from Iran but from local actors on Iraqi territory, specifically Iran-linked Shia militia factions. One shaken oil ministry official in Basra labeled it treason.

Officials speaking privately identified the Islamic Resistance in Iraq, an umbrella of Shia armed groups originally backed by Iran to oppose American forces post-2003, as responsible. These factions also belong to the Popular Mobilisation Units, a coalition of mainly Shia militias formed in 2014 against Islamic State. Though nominally under government control the PMU pursues independent goals, bolstered by construction and farming ventures.

Despite Iraq's Shia majority and apparent central authority in Baghdad, various post-2003 groups wield substantial sway. Two militia categories exist: those safeguarding economic stakes such as state contracts, and those motivated by ideology, aligned with Iran's aims against Israel and American regional presence.

In 2026 this fragile setup has produced violence unseen in years. The US-Israeli campaign against Iran has mobilized hardline ideological militias to assist Tehran, striking Iraqi oil sites, American bases and the embassy in Baghdad. Meanwhile new US-supported prime minister Ali al-Zaidi has set a 30 September deadline for all militias to disarm and merge into state forces, fulfilling American goals to curb Iranian sway.

Al-Zaidi has achieved partial success yet core groups refuse to relinquish arms. With American forces still present and Israeli aircraft overhead, the IRI factions intend to persist.

Government voices express frustration over the petroleum strikes. One official noted the targeted sites sat on Iraqi land with Iraqi-funded equipment. Losses would hit the local economy rather than US firms, which could bill Iraq, damaging business confidence. Attackers possessed precise inside knowledge of targets.

Officials in Basra explained the goal was to curb output, elevate world prices and pressure Washington to halt its Iran campaign. Within weeks Basra production dropped by two-thirds and exports ceased. The aim may also involve pushing out western firms for replacements from sympathetic nations.

The Iran war's effects, intensified recently by ceasefire breakdown, have hit Iraq hard, underscoring divisions between the conflict's chief adversaries.

In an upscale Baghdad eatery a government adviser described prior success containing militia factions through talks, even amid Gaza fighting and the 2025 Israel-Iran clash. Khamenei's death altered that. Participation can no longer be discouraged as it represents an existential and faith-based obligation.

The adviser understood Iranian and allied actions. Iraqi airspace and bases aided strikes on Iran while 40,000 Starlink units entered Iran via Iraq during protests. Gratitude was due that full retaliation was avoided, as half the country could have been devastated, with little means for defense.

Elsewhere in Baghdad a senior security contact with long American ties dismissed Iranian concerns yet agreed on Iraq's military shortcomings. The war exposed national weakness beyond defense, with airspace exploited by both parties. The state failed to shield its own troops from militia assaults despite knowing the perpetrators and launch sites.

Referring to nearby police and street cameras he questioned how rocket launches occurred in central Baghdad without detection at checkpoints. Discussion shifted to graft: many top posts require payments, turning commands into profit ventures via fraud and bribes, eroding discipline when leaders model such behavior.

Economics clarifies splits between older militias accepting incorporation into state structures and newer IRI hardliners. In late May Moqtada al-Sadr urged his group join state command, followed by two others, yet ideological factions scorned the idea, deeming weapons holy until end times. They framed their fight as ideological versus the economic focus of predecessors.

On 7 April Iran and the US paused hostilities. The IRI followed suit the next day. Concurrently Iraq and Saudi teams discussed reviving the pre-1990 pipeline to reroute oil past Hormuz.

With oil output stalled, fuel lines formed reminiscent of 2003 turmoil. The oil ministry attributed shortages to closed refineries after foreign exits and export halts on heavy residues.

For an oil-reliant state funding four million public jobs, militia strikes on domestic infrastructure seemed self-defeating. A Basra activist noted many view oil firms as exploiters and see attacks as warranted. Basra suffers extreme pollution from flares and poor water while wealth concentrates among few, breeding indifference to corporate losses.

Why has postwar Iraq failed to leverage oil riches for broad improvement? Pre-2003 infrastructure lay damaged from prior wars and sanctions, sustained only by experienced engineers. Post-invasion looting and sabotage nearly ended production. Lacking resources Iraq enlisted foreign firms like BP, ExxonMobil and Shell under service-fee contracts rather than profit shares, preserving 1972 nationalization pride. Ambitious targets of 12 million barrels daily by 2017 went unmet, with output near 4.5-5 million in later years.