• Iraq is negotiating a one-month sanctions waiver that would let Iraqi Airways carry pilgrims between Iraq and Iran.
  • The move follows the suspension of all flights to Iran after U.S. restrictions took effect on September 23.
  • Najaf, a key Shiite pilgrimage hub, has been hit hard, forcing travelers into 12-hour land journeys.

Fragile Negotiations

Iraq is seeking a time-limited U.S. sanctions waiver that would allow Iraqi Airways to transport pilgrims between Iraq and Iran for one month, according to people familiar with the matter. The proposal aims to restore a narrowly humanitarian and religious air link that was severed when Baghdad suspended all Iran-related flights in response to sweeping U.S. restrictions on Iran’s aviation sector.

As of September 28, negotiations between Iraqi and U.S. officials are ongoing, and no final waiver has been formally granted. The talks are delicate: Washington has made clear it wants to penalize support for sanctioned Iranian carriers, while Baghdad argues that any resumed service would serve medical, educational, and religious needs.

The disruption began after U.S. measures took effect on September 23, prompting airports in Baghdad, Najaf, Erbil, and Sulaimaniyah to halt flights to and from Iran. Najaf is particularly consequential, as it is a principal destination for Shiite pilgrims. The suspension has forced some travelers into arduous land journeys of at least 12 hours.

A Narrow Corridor

The headline proposal—allowing Iraqi Airways, rather than Iranian carriers, to transport pilgrims for one month—is designed to preserve religious travel while reducing the direct exposure of Iraqi airports and service providers to sanctions risk from handling designated Iranian airlines. That is an inference from the reported waiver effort and the U.S. sanctions structure, rather than a publicly released waiver text.

On September 8, the U.S. Treasury’s Office of Foreign Assets Control sanctioned 27 Iranian airlines and other aviation-linked targets under “Operation Economic Outcast.” The Treasury said the action covered 36 targets in total, arguing that Iran’s aviation sector supports the movement of weapons, personnel, and illicit cargo. It also said aviation safety-related requests will be considered case by case.

The practical result has been reduced regional connectivity for Iran, disrupted passenger traffic, and more demand for overland routes or alternative international connections. The UAE, Oman, Iraq, Georgia, and Azerbaijan were among locations reported to have curtailed relevant Iranian services.

Economic and Political Stakes

The pause affects not only pilgrims but also Iraqi students in Iran and people seeking medical treatment there. The shift to lengthy overland travel raises time, safety, and expense burdens. Najaf and other Iraqi religious cities depend heavily on visiting pilgrims for hotels, transport, restaurants, retail, guides, and local airport activity.

Even if passenger demand remains strong, foreign airports and aviation vendors may avoid Iran-linked business because the potential loss of access to dollar clearing and the U.S. financial system is a much larger commercial risk. As one regional aviation executive put it, “compliance teams are not going to sign off on anything that even smells like Iran.”

Iraq is balancing two exceptionally important relationships. With the United States, Iraq needs to avoid secondary-sanctions exposure for its airports, companies, and financial system. With Iran, Iraq shares deep religious, commercial, educational, and social links. Reporting cites roughly 100,000 Iraqi students in Iranian institutions, hundreds of thousands of Iraqis living in Iran, and thousands of daily cross-border movements.

The flight halt has produced criticism from Iran-aligned Iraqi political and militia circles, who portray compliance with U.S. restrictions as an infringement on Iraqi decision-making. Demonstrators in Baghdad have protested the suspensions, and scholars and students associated with the Najaf Hawza, a major Shiite religious seminary, held a vigil urging the Iraqi government to protect its independence in decision-making. Iraqi leaders have simultaneously framed their request as a humanitarian necessity and called for regional de-escalation.

Precedent and Outlook

There is a relevant recent precedent: the U.S. Treasury removed Fly Baghdad and two Boeing (BA) 737 aircraft from its sanctions list in August 2026, two years after the airline was designated over alleged links to Iran’s Islamic Revolutionary Guard Corps. That shows sanctions status can change through U.S. administrative action, but it does not guarantee approval of this new, broader pilgrimage-related waiver.

The main question is whether Washington grants a narrowly written, temporary authorization—potentially limited by carrier, route, airports, passenger purpose, duration, payment channels, and operational safeguards. A one-month Iraqi Airways-only arrangement would be consistent with Baghdad’s attempt to restore essential civilian travel without reopening a full network for sanctioned Iranian airlines.

A rejection, delay, or overly restrictive waiver would prolong the disruption at Najaf and other Iraqi airports, maintain pressure on religious travel, and intensify domestic criticism of Baghdad’s handling of U.S.-Iran tensions. The episode could also create a more durable split between religious and civilian travel routes and broader commercial aviation links with Iran.

Iraqi airports and airlines may need stronger sanctions-screening, documentation, financial controls, and contractual protections, raising the cost of regional aviation operations. Even a successful waiver would not eliminate the structural issue: Iranian carriers, and companies servicing them, remain exposed to sweeping U.S. restrictions. The result may be a continuing patchwork of exemptions, rerouting, and compliance-driven service reductions.

The waiver’s diplomatic value may be as important as its transport value. It would signal whether Iraq can obtain limited flexibility from Washington while maintaining its religious and economic ties with Tehran. The most defensible current assessment is that the proposal is a humanitarian pressure-release mechanism, not a broad reversal of U.S. aviation sanctions. Its durability will depend on the exact terms issued by U.S. authorities, whether Iraqi Airways can operate with sufficient legal separation from sanctioned Iranian carriers, and the trajectory of broader U.S.-Iran tensions.

Correction: An earlier version of this article misstated the date U.S. measures took effect. They took effect on September 23, not September 8.