Iraq parliament approves al-Zaidi's full cabinet, including US-sanctioned deputy premier

Government formation completed as Baghdad faces severe cash crunch tied to the ongoing war with Iran

By LineZotpaper

Published16 October 2026

Read Time2 min

Iraq's parliament has completed the formation of Prime Minister Ali al-Zaidi's government, approving 11 vacant cabinet posts and three deputy prime ministers, including a senior leader of a US-sanctioned, Iran-backed movement, as the country grapples with severe liquidity shortages linked to the war on Iran.

Iraq's parliament has completed the formation of Prime Minister Ali al-Zaidi's government, approving the remaining vacant cabinet posts and three deputy prime ministers after a vote on Thursday.

Lawmakers approved 11 portfolios. Nayef al-Shammari was confirmed as defence minister, Yasir al-Maliki as interior minister, and posts were filled for planning, culture and higher education and scientific research. A vote on the nominee for migration and displacement minister was postponed because of disagreement among parties.

Among the deputy prime ministers approved was Laith al-Khazali, a senior leader of the Iran-backed Asaib Ahl al-Haq movement and brother of its leader, Qais al-Khazali. The United States designated Asaib Ahl al-Haq as a foreign terrorist organisation in 2020 and named both brothers "specially designated global terrorists", citing attacks including a 2007 assault that killed five US soldiers. The Treasury Department sanctioned the brothers in 2019 over the killing of protesters in Iraq.

After the vote, al-Zaidi thanked parliament and called on his deputies and ministers to "fulfil their responsibilities with the highest levels of commitment, competence and integrity". He said the government was beginning a phase of accelerated, diligent work to address exceptional economic and security challenges imposed by the US-Israel war on Iran, which began on February 28.

Iraq is facing severe liquidity shortages stemming from the conflict. Before the war, the country exported roughly 3.5 million barrels of oil per day through the Strait of Hormuz, generating 90 per cent of government revenue. To cover essential public spending and salaries, al-Zaidi, a former banker, devalued the dinar by almost 15 per cent against the US dollar.

He said the government inherited public debt exceeding 208 trillion Iraqi dinars ($139bn at the new exchange rate) when it took office in May, raising questions about the previous administration of Mohammed Shia al-Sudani. Al-Zaidi added that the state needs about 10 trillion dinars ($6.7bn) monthly to cover salaries and critical spending.

Analysis

Why This Matters

Iraq now has a fully formed government at a moment of acute economic stress, with the dinar devalued by almost 15 per cent and public debt exceeding 208 trillion dinars.
The installation of a deputy prime minister under US sanctions creates an immediate point of friction between Baghdad and Washington.
With oil exports that generated 90 per cent of government revenue disrupted, the state's ability to pay salaries depends heavily on the course of the war.

Background

Iraq's governments are typically formed through negotiation among sectarian and political blocs, with ministries distributed among parties, a process that often leaves portfolios vacant for months. Al-Zaidi, a former banker, took office in May and has since moved to stabilise public finances, most recently through a nearly 15 per cent devaluation of the dinar. His government says it inherited the economic crisis from the administration of Mohammed Shia al-Sudani, while the broader pressures stem from the US-Israel war on Iran that began on February 28 and has disrupted the oil exports on which the Iraqi state depends.

Key Perspectives

The al-Zaidi government: Casts itself as inheriting extraordinary economic and security challenges and promises accelerated, diligent work, urging its new ministers to show commitment, competence and integrity. The United States: Washington has designated Asaib Ahl al-Haq as a foreign terrorist organisation and sanctioned the Khazali brothers, making Laith al-Khazali's approval a potential strain on bilateral ties. Iraqi political parties: Disagreement over the migration and displacement minister forced a postponement of that vote, signalling that friction within the governing coalition persists.

What to Watch

The rescheduled vote on the migration and displacement minister and whether it reveals deeper splits within the coalition.
Any US response, diplomatic or otherwise, to a sanctioned figure holding a senior government role.
Monthly indicators of Iraq's liquidity position, with the state needing about 10 trillion dinars ($6.7bn) a month to cover salaries and critical spending.

Sources

Iraq parliament approves al-Zaidi’s cabinet amid growing economic concerns — Al Jazeera – Breaking News, World News and Video from Al Jazeera