Iraqi Prime Minister Ali al-Zaidi spent one week in July 2026 doing two things that do not usually sit together. He joined funeral rites for Iran’s late Supreme Leader Ayatollah Ali Khamenei in Najaf, then flew to Washington to shake hands with Donald Trump.

That contrast sums up where Iraq stands right now. Iraq-Iran ties and Iraq-US ties are pulling Baghdad in opposite directions, and the pressure matters well beyond the Middle East. Iraq is a major oil producer and one of the key crude suppliers watched by Indian refiners, so any shift in Baghdad’s politics can feed into global crude markets and, eventually, what Indians pay for fuel.

A Mourner in Najaf for Khamenei

Khamenei was killed in a US-Israeli strike on February 28, 2026, at the start of the current Iran war. His funeral ceremonies began in Tehran on July 4, moved through major Shia religious centres and ended with burial in Mashhad on July 9, according to Al Jazeera.

When Khamenei’s coffin arrived in Najaf on July 7, Reuters reported that Iraqi Prime Minister Ali al-Zaidi and senior Iraqi officials received it at Najaf International Airport, with Iranian President Masoud Pezeshkian also attending. Najaf, home to the shrine of Imam Ali, is one of the most important Shia holy cities in the world, which made Iraq’s participation politically and religiously sensitive.

For al-Zaidi, skipping the ceremony would have risked angering Tehran and Iraq’s powerful Shia political networks. Attending it, however, put him in a delicate position before his next stop: Washington.

Days Later, a Handshake With Trump

Six days after receiving the coffin, al-Zaidi left for a week-long visit to Washington on Monday, July 13, his first foreign trip since taking office in May 2026, according to Al Jazeera. Trump had publicly backed al-Zaidi, a political newcomer, during Iraq's elections. "I've watched what was happening in Iraq with the elections, and I put a very strong endorsement out because I was very unhappy with the man that was supposed to win the election," Trump said, per Middle East Eye.

The two met at the White House on Tuesday, July 14. Trump added an unplanned lunch to the schedule, and both leaders pledged to deepen economic ties and lift Iraq's oil output, according to Axios.

Trump also raised the 2020 killing of Iranian Gen. Qassem Soleimani during the Oval Office session. Al-Zaidi sidestepped it. "At that time, I wasn't involved in politics. Let's talk about the future," he said, per ABC News (AP).

Oil Deals and a Pipeline to Turkey

Energy was at the centre of the Washington visit. AP reported that two Iraqi officials said a major agreement was expected involving Iraq, US companies Chevron and TI Capital, and Qatar’s UCC. The proposed pipeline would connect Basra in southern Iraq to Haditha in western Iraq, then to Turkey’s Ceyhan port and Syria’s Baniyas port.

The projected capacity is about 2 million barrels per day. That is why the plan matters. If completed, it could give Iraq a major export route that reduces some dependence on the Strait of Hormuz, a chokepoint that has repeatedly become the centre of global oil anxiety during the Iran war.

Neither Trump nor al-Zaidi gave full public details of the pipeline during the Oval Office meeting. But Trump said the US and Iraq would do “a lot of deals,” while al-Zaidi’s office said the visit was meant to attract investment, expand the role of US companies and develop Iraq’s energy sector, according to AP.

What It Means for India's Fuel Bill

For India, this is not a distant diplomatic story. India imports most of the crude oil it consumes, and Iraq has remained one of the important suppliers in India’s crude basket. Any instability around Iraq, the Strait of Hormuz or Gulf shipping routes can quickly affect oil sentiment, insurance costs and refinery planning.

A Basra-to-Turkey pipeline would not solve every problem, and it is still only a proposed project. But if it moves forward, it could matter during future Gulf flare-ups by giving Iraq another route to move crude out of the region. That is why Indian policymakers and oil companies will watch both the pipeline plan and the September 30 deadline closely.

TUI has tracked how fast that risk shows up at the pump. When Trump earlier threatened to bomb Iran's power plants, oil prices jumped and India faced a real fuel supply scare, as TUI reported at the time. The actual US strikes on Iran later forced a similar reckoning over India's LPG supply chain, detailed in TUI's coverage of the strikes.

Al-Zaidi’s government has to hold together three difficult things at once: religious legitimacy with Iran, economic access to Washington and control over armed factions at home. Whether the September 30 deadlines on US troop withdrawal and militia disarmament actually hold will say a lot about which side of that balance Baghdad leans toward next.