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 The U.S. control over Iraq’s oil revenues primarily stems from the management of Iraq’s oil income through the  After the , the Coalition Provisional Authority (CPA), led by the U.S., established the Development Fund for Iraq (DFI), which was held at the New York Fed. The DFI was designed to collect Iraq’s oil revenues and use them for the country’s reconstruction and development. It was also set up to protect the Iraqi oil revenues from lawsuits and claims relating to Saddam Hussein’s rule. Then-president  signed an executive order, which has been renewed by every president since, that set up the arrangement. 
The DFI eventually became an account of the at the New York Federal Reserve, which remains the case today.

What leverage does this give the U.S. over Iraq?

Oil is , accounting for some 90% of the state budget. This gives significant sway over the country’s economic and political stability. When the asked U.S. troops to leave the country in 2020, 

Washington reportedly threatened to cut Iraq’s access to the New York Federal Reserve funds, with Baghdad ultimately backing down. While the Iraqi government has gained more control over its financial affairs since the early years of the U.S. occupation, the ongoing relationship highlights the enduring influence of the U.S. on Iraq’s economic landscape, even as the country seeks to assert its sovereignty and independence..........

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