Pentagon Set to End $61 Million Peshmerga Aid as Last US Base in Iraq Closes – SOFX

The US Department of Defense has told Kurdistan Regional Government leaders it will not renew a security assistance agreement for the Peshmerga, cutting off $61 million a year to the Kurdish force weeks before the last American base in Iraq is set to close. Four sources familiar with the closed-door talks described the plan to the BBC, which first reported the decision.

The memorandum of understanding between the Pentagon and the KRG expires September 30, the same day US and coalition forces are scheduled to complete their withdrawal from Iraq. That departure will formally end Operation Inherent Resolve, the international campaign against the Islamic State that the Peshmerga fought alongside. The only remaining US installation in the country, at Erbil, is expected to close in September.

The cut had been signaled months earlier. In its fiscal year 2027 budget request, released April 3, the Pentagon zeroed out direct Counter-ISIS Train and Equip Fund support for the Ministry of Peshmerga Affairs, down from $61 million, arguing that the Islamic State’s defeat justified reallocating the money. That request remains frozen in a broader congressional spending fight. The Peshmerga fields roughly 180,000 troops and uses the funds for weapons, training, and stipends.

One detail in the same budget complicates the official rationale. While the Peshmerga ministry drops to zero, a Sulaymaniyah special operations unit tied to the Patriotic Union of Kurdistan sees its allocation rise to about $5 million, and the fund adds Jordan and Lebanon as recipients for the first time. If the driver were simply the winding down of the ISIS mission, the Sulaymaniyah line would not be growing.

The structural problem the aid was meant to fix has never been fully resolved. While Unit 80 (historically KDP) and Unit 70 (historically PUK) have been legally transitioned into regional commands under the Ministry of Peshmerga Affairs, party-based chains of command still persist.

The 2022 reform milestones, which were heavily backed by the U.S., were originally meant to be completed by September 2026. Because the integration targets remain unfulfilled, the U.S. is currently planning to wind down its direct financial assistance agreement as the deadline approaches.

The timing lands as Iran presses the region. Iran and Iran-aligned militias carried out about 855 missile or drone attacks inside Iraqi Kurdistan by late May, according to reporting compiled by Rudaw and other sources. A March strike on a Peshmerga base in Erbil province killed at least five fighters and wounded roughly 19.

Yerevan Saeed, director of the Global Kurdish Initiative for Peace at American University, told the BBC that abandoning the Kurds would reward Tehran. “This is going to be a big win for Iran, China, and Russia if the Kurds are left so exposed,” he said.

A source familiar with Pentagon thinking said a final decision on security engagement is still under review, and that Washington is weighing ways to maintain some support in both Iraq and the Kurdistan Region after the withdrawal. The KRG declined to comment, and the Peshmerga ministry said it had received no official notification of any halt, three sources told Rudaw.