U.S. Ends Iraq Presence: The Last Troops Leave—What Happens to the Fight Against ISIS?

The United States has completed the withdrawal of its remaining forces from Iraq, marking the end of a long military footprint that began with the 2003 invasion and continued through later coalition missions. On Iraq’s self-described “day of sovereignty,” U.S. and Iraqi commanders formally marked the departure, with Iraqi forces taking over the coalition’s remaining bases. Multiple outlets report that the final drawdown was carried out under an agreement between Baghdad and Washington, and that the U.S. military says it has finished the process. France24 frames the moment as a handover after years of operations against the Islamic State, while a Pentagon spokesperson statement cited by Kommersant indicates the official completion of the “Unwavering Resolve” operation. Geopolitically, the move reshapes the balance of security influence in the Middle East at a time when ISIS remnants and regional power competition remain unresolved. The immediate beneficiary is Iraq’s sovereignty narrative: Baghdad gains control of bases and can present the transition as a consolidation of national authority. For the U.S., the withdrawal reduces forward-deployed leverage and may constrain Washington’s ability to rapidly influence counter-ISIS operations, intelligence collection, and deterrence dynamics. Retired U.S. national security leadership commentary (via NPR’s interview with H. R. McMaster) underscores that the regional impact will depend on how effectively Iraqi forces and partners sustain pressure on ISIS and manage internal and external security pressures. Market and economic implications are likely indirect but potentially meaningful through risk premia and energy security expectations. A full U.S. drawdown can shift investor perceptions of regional stability, affecting Middle East shipping insurance costs, defense procurement expectations, and the risk premium embedded in oil and refined products. If counter-ISIS operations weaken, markets could price higher tail risk for disruptions along regional logistics corridors, which typically lifts volatility in crude benchmarks and regional currency sentiment. Conversely, if the handover is orderly and Iraqi forces maintain operational tempo, the event can support a gradual normalization of risk pricing, easing pressure on energy-linked equities and regional sovereign spreads. The next phase to watch is whether Iraq can sustain base operations, intelligence fusion, and rapid-response capabilities without U.S. forces on the ground. Key indicators include Iraqi military readiness announcements, the frequency and success rate of operations against ISIS cells, and any public signaling from Baghdad regarding the scope of remaining foreign support. For markets and security planners, trigger points include renewed ISIS attacks, disruptions to coalition-era infrastructure, or renewed negotiations over future advisory or intelligence arrangements. The timeline for escalation or de-escalation will likely be measured in weeks to months after the handover, as security gaps—if any—tend to surface quickly once external forces depart.

Geopolitical Implications

• 01

  Shifts security influence from Washington to Baghdad during the counter-ISIS transition

• 02

  Creates a near-term capability gap risk that could be exploited by ISIS remnants

• 03

  Strengthens Iraq’s sovereignty narrative and affects future negotiation leverage

• 04

  Signals broader U.S. recalibration in the Middle East

Key Signals

• —Iraqi readiness and base-management announcements after the handover
• —Post-withdrawal ISIS attack frequency and operational outcomes
• —Any Baghdad-Washington follow-on arrangements for ISR or advisory support
• —Public messaging on remaining coalition-era capabilities