U.S. Removes Sanctions on Iraqi Carrier Fly Baghdad Amid Iran Talks

On Wednesday, the U.S. Treasury's Office of Foreign Assets Control announced that Fly Baghdad, an Iraqi airline also operating under the names Iraq Express and Fly Baghdad, was removed from the Specially Designated Nationals list, along with two of its Boeing 737 aircraft. The carrier had been placed on the sanctions list in January 2024 for purportedly providing support to Iran's Islamic Revolutionary Guard Corps Quds Force and its allied groups across Iraq, Syria and Lebanon.

The delisting notice did not detail the reasons for the change, which is typical for such actions. This development occurs as U.S. and Iranian officials hint at a potential deal to restore traffic through the Strait of Hormuz, a waterway that has faced recent disruptions. President Donald Trump said the discussions were “very good” and suggested an agreement could be reached imminently, while Iranian sources confirmed talks with Oman, a neighboring state, but have not verified direct U.S. negotiations. The move may signal a shift in U.S. policy toward Iran-linked entities as diplomatic overtures progress.