What’s left of the Iraqi army will be running to Tehran pretty soon.
“....threatens to fragment Iraq on ethnic and sectarian lines.”
The possibility is no longer a threat, it is fast becoming a reality. Iraq was only a loose federation before, with the Sunni minority effectively locked out of any participation in the national government, because of adherence to “democratic” principles of government. Essentially, because there were numerically far more Shi’ites than Sunnis in Iraq, the Sunnis were and are always outvoted on ever major decision. The Kurds were in a semi-automatous region, and did not concern themselves with the overall national Iraqi politics so much. But since the unrest started, there is considerable agitation to proceed with the formation of a new country of Kurdistan, carved out of Syria, Turkey and Iran, as well as Iraq.
Southern Iraq, from Baghdad all the way to the frontier with Saudi Arabia and the Gulf, probably will end up annexed to the Islamic Republic of Iran, as a vassal state if not an integral part of Iran. This puts Iran in a direct nexus with Syria, and opens an easy access to rush logistical support to Bashar al-Assad, the embattled leader of Syria, to hold onto power in that country.
Saudi Arabia, no longer able to call upon the US military as mercenary forces to provide a shield for them, shall be compelled to either find another ready-made armed force to cover the border, or put its own people in the field, an unwelcome change for the Royal Saudi family.
Meanwhile, the upstart Caliphate will be consolidating power through the old crescent from the heart of Mesopotamia to the Mediterranean, and from this springboard, launch into recreating the Ottoman Empire.
We are doomed to live in interesting times.