The United States is planning to terminate its military aid to the Kurdish Regional Government (KRG) in Iraq, a move that has ignited security concerns in Iraqi Kurdistan amidst heightened tensions with Iran. The memorandum of understanding governing Pentagon support for the Peshmerga forces is set to expire on September 30, coinciding with the withdrawal of the final U.S. troops from Iraq.
This withdrawal will mark the end of the international military campaign against the Islamic State (IS), in which the Peshmerga played a crucial role alongside coalition forces. The sole remaining U.S. military base in the Iraqi Kurdish capital of Irbil is slated to close next month.
The Peshmerga, comprising approximately 180,000 troops, received $61 million in fiscal year 2026 for weapons, training, and stipends through the Pentagon's counter-IS program. The Pentagon had initially proposed cutting all security aid in its fiscal year 2027 budget request, arguing that the defeat of IS rendered the funding unnecessary and that the funds should be reallocated. This proposal is currently pending amidst broader budget deliberations in Congress.
Officials in Iraqi Kurdistan had hoped the U.S. would renew the funding through an extension of the current agreement. However, according to sources familiar with discussions, U.S. defense department officials have indicated during recent talks with Iraqi and Kurdish leaders that an extension of the memorandum of understanding is not planned. The U.S. first established military assistance to the Peshmerga through a memorandum of understanding in 2016, renewing it in 2022.
The region has witnessed a significant increase in attacks attributed to Iran and Iran-backed militias. By late May, Iran and its proxies had conducted 158 missile or drone attacks within Iraqi Kurdistan, according to research compiled by the Foundation for Defense of Democracies. Despite this surge in aggression, the U.S. does not intend to extend the current aid agreement.
A final decision regarding the overall security engagement between the U.S. and Kurdistan is still under review. Sources indicate that the U.S. is exploring alternative methods to maintain some level of security support in both Iraq and Iraqi Kurdistan following the troop withdrawal.