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Looking at the notes for the 1939 Campaign I don't see anything negative if the UK invades Iraq before France falls. I also remember a UK unit appearing in Iraq later in the game. Our PBEM is currently in the first week of June.

If there is no downside then it would benefit the UK as they would start getting Iraq oil earlier.

I'm curious what you experienced players do in regards to the timing of invading Iraq.

The UK initially has little strength to invade Iraq, but yes, it can. But he only receives oil, which unless the UK player does very badly, he will have oil left over throughout the game.