Hitler’s first stage in this strategy was to invade Greece and subsequently seize Crete. During this phase the German diplomatic service and intelligence organisations were making stronger contacts with opposition parties in Iraq.
Iraq had been made a protectorate at the end of the First World War by the League of Nations and had became nominally independent in 1932. However, before granting independence, the United Kingdom concluded a treaty which allowed the UK to keep control of Iraqi oil by the establishment of British basis and unrestricted British military movement throughout the kingdom. By 1937 there were no British troops left in Iraq except for two RAF bases at Shaibah near Basra and Habbaniyah near Fallujah. These bases protected British interests in Iraq petroleum and maintained the air link between Egypt and India. Habbaniyah was also a training base with the usual RAF Air Control orbat of Aircraft, armoured cars and local Levies. At the outbreak of the Second World War, the Iraqi government broke off diplomatic relations with the German powers, but refused the British demand for them to declare war. An openly anti-British Government took power in April 1940 and made backdoor contacts with German representatives in the Middle East. When Italy joined the war on the side of Germany in 1940, Iraq did not break off relationships and allowed the Italian embassy in Baghdad to become the centre of anti-British mischief. The Iraqi leader, Rashid Ali’s, support in the country had begun to wane and with the prospect of a Civil War looming he was forced to resign. Public opinion began to swing away from the axis governments due to a series of defeats, for the Italians, in Africa and at the Mediterranean. However in March 1941 a coup d’état – supported by the military – returned Ali to power proclaiming a National Defence Government. Severe punitive measures were then taken against pro-British supporters, and British forces were denied the provisions of the 1930s treaty.
This denial of petroleum and interference with links to the rest of the Empire was a great advantage to Germany and, operating through Syria and its Vichy French Government, more overt linkages were being made with the Iraqi government.