Trump blocks Iraq cash payments, pressures Iran-backed militias

The Trump administration has blocked cash payments to Iraq to compel the disbanding of Iranian-backed militias. Odds for Trump attending a US-Iran diplomatic meeting now sit at 15% YES.

The move hardens Washington’s stance against Iran’s proxies and makes diplomatic engagement less likely. The market on whether no qualifying US-Iran diplomatic meeting will occur by June 30, 2026 has jumped to 17.1% YES, up from 9% yesterday, as traders grow more skeptical about near-term diplomacy.

Odds for Trump agreeing to Iranian oil sanction relief in April have collapsed to 3.8% YES, down from 14% yesterday. Traders clearly don’t expect concessions. Daily volume on this market is $1,944 in USDC, and just $119 can move it 5 points, so the contract is thin and reactive to headlines.

Blocking cash payments to Iraq while demanding militia disbandment raises the cost of any future negotiation for both sides. Financial and military pressure on Iran’s proxies in Iraq makes a negotiated settlement harder to reach in the short term. At 3.8¢, a YES share for oil sanction relief pays $1, a 26.3x return, but that requires a major reversal within days.

Watch for Trump social media posts or official statements signaling any change in diplomatic posture. Key indicators: confirmation of talks involving senior officials, or reports of shifts in military strategy toward Iranian proxies.

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