On July 28, the US and Saudi Arabia launched coordinated airstrikes against Iran-backed militia targets in eastern Iraq. The strikes focused on logistics centers and weapons caches tied to the Popular Mobilization Forces, a group aligned with Tehran.
At least 20 militia fighters died in the attacks. Iraqi authorities reported civilian casualties as well and condemned the operation, highlighting the complex position Iraq finds itself in amid the regional tensions.
The airstrikes followed a relentless barrage of over 30 drone assaults by IRGC-backed forces aimed at US troops and Saudi oil infrastructure over three days. These attacks, averaging one every two and a half hours, made a military response almost unavoidable.
The conflict traces back to a flare-up in late February 2026, marking these strikes as the most significant joint US-Saudi military action in recent months.
The blow to oil infrastructure instantly sent crude prices soaring more than 4% the day after the attacks. Higher oil means costlier production globally, pushing inflation expectations up and dampening hopes for central bank rate cuts. That tightens financial conditions, often squeezing risk assets like cryptocurrencies.
Crypto markets usually react sharply to oil-driven shifts in monetary policy outlooks. When liquidity tightens, Bitcoin and altcoins typically face downward pressure. Traders are bracing for increased volatility following this geopolitical shock.
Institutional moves between Bitcoin and Ethereum suggest growing sensitivity to macroeconomic factors, making the crypto sector vulnerable to oil price shocks and related financial tightening.
Iraq remains stuck between balancing its alliance with Washington and managing powerful Iran-aligned factions within its government. This dynamic limits Baghdad’s ability to prevent further strikes as militia attacks continue.
The situation remains fluid, with energy markets and crypto watchers closely monitoring any new developments.
This material is for informational purposes and does not constitute financial advice.
