This paper will explicate the modern history of Iraq’s political economy since the establishment of the modern Iraqi state as a League of Nations’ mandate in 1920 through the current period. It will highlight three themes that have influenced the shape and direction of Iraq’s political economy: the state, oil, and war. It will do so in opposition to already existing literature that tends to emphasis one factor over the others, and also tends to treat Iraq in isolation from the regional and international context in which it exists and operates. While the political system may affect questions of redistribution and social justice, it is the state’s ability to extend its territorial and bureaucratic control that has historically led to the emergence, strengthening, or weakening of the national economy. The rentier state theses have been used by scholars from different intellectual (and sometimes opposing) intellectual traditions to understand Iraq’s political economy. In light of recent critical works, this paper will outline arguments of the “rentier state” approach and show their limitations in understanding the role of oil in Iraq’s political economy. It will do so by giving a historical account of the role of oil in Iraq’s modern history. War and armed conflict have shaped the focus of the economy (a classic war economy in the 1980s, the sanctions economy in the 1990s, and the various counter insurgencies since the 1930s) and thus must be understood as an integral element of the history of Iraq’s political economy.