As the Iran war spreads, old sectarian rivalries that almost pushed Iraq into civil war two decades ago are resurfacing, locals say. On social media and in the streets of cities like Basra, tensions are rising.
“You can tell that a segment of the Shiite community [in Iraq] views this battle as existential,” said Wissam Yassin, a digital marketer in Basra. “They see the weakening of Iran as a direct threat to themselves, not only on an emotional level but also in terms of the political power they currently have here. They see any strike against Iran as a strike against them.” He added that many Sunnis see the war as “an opportunity to rearrange the political landscape, as Iranian influence on Iraq gets weaker,” a division he called Iraq’s most dangerous threat.
Iraqi journalist Kamal Alaash warned on social media that the fallout could be profound: “What happened after the dictator Saddam Hussein was removed will be a drop in the ocean compared to what will happen here after the death of Khamenei. What’s coming will change the region, maybe even borders. Oh lord, let Iraq get through this safely.”
Iraq never stays separate from developments in Iran. The countries share roughly 1,500 kilometers of border and deep commercial, political and military ties. Iraq is also the only country in the region so far to have been attacked by both sides in this conflict. After US and Israeli strikes on Iran, Tehran retaliated by targeting US bases across the Middle East. In Iraq, Iran-allied paramilitary groups sought to strike American targets, while US or Israeli forces (responsibility remains unclear) bombed Iran-aligned militias inside Iraq.
Renad Mansour, director of the Iraq Initiative at Chatham House, argued Iran is likely to try to prolong the conflict to exploit limited US appetite for escalation and raise political costs for Washington — costs Iraq will inevitably share.
Beyond violence, the war risks major economic disruption. Bilateral trade between Iran and Iraq reached about $12 billion in 2024; Iran supplies roughly a fifth of Iraq’s consumer goods and has been used to bypass US sanctions and access foreign currency. Iran is also a key energy supplier: in 2023 Iranian gas accounted for about 29% of Iraq’s electricity generation, according to the Clingendael Institute. That dependence raises worries ahead of another hot summer, when power and water shortages quickly spark public anger. In Iraqi Kurdistan the Khor Mor complex — which supplies much of the region’s power and is run by a UAE company — has been shut to protect workers.
If Iran’s instability deepens, those economic and energy links could be disrupted. Iraq’s economy relies heavily on oil sales; if tanker traffic through the Strait of Hormuz is blocked, state oil income could fall sharply, undermining the government’s ability to pay a large public sector. The government currently pays salaries or benefits to around 7 million people. Iraq experienced unrest in 2020 when falling oil prices delayed salary payments during the COVID-19 pandemic.
Politically, Tehran wields outsized influence in Iraq through Shiite parties and militias. Iraq is in the process of forming a government after November 2025 elections, a process often fraught with factional bargaining. Negotiations stalled recently over the choice of prime minister; the US criticized the candidacy of former prime minister Nouri al-Maliki as too close to Iran. A weakened Iran could shift these calculations. Mansour warned the war will affect government formation in many possible ways, from delays to the creation of an emergency government to address the crisis.
Some see a potential silver lining. Mohammed Anouz, a lawyer and former MP, said foreign interference has long undermined Iraqi independence. Victoria Taylor, director of the Iraq Initiative at the Atlantic Council, wrote that a less meddlesome Iran could allow Iraq to reassert sovereignty, bind more closely to the West and region, and reduce Tehran’s influence. But independent researcher Hamzeh Hadad cautioned that while Iraqis are practiced at adapting to hardship in the short term, prolonged war could worsen instability. He noted it is unclear whether changes in Iran would ultimately benefit Iraq; any transition could spill across the border and bring little immediate upside.
“Some may see this as a kind of positive change,” Mansour said. “But the challenge is that nobody is sure what comes next. History tells us that there’s more likely to be more chaos and more violence before anything is settled, and that, I think, is a scary thought for many Iraqis.”
Meanwhile, Iraq has already experienced direct incidents linked to the wider conflict: airports and bases, including Baghdad and Erbil — which hosts a large US consulate and military complex — have been targeted, heightening fears that the country could become an open battleground in a wider regional conflagration.