Paying Iraqi citizens a yearly "dividend" from the country's oil wealth (a la Alaska) would have an enormous and unpredictable effect on the Iraqi economy. The Alaska oil dividend is small compared to the per capita income of the state, but proposals for a similar Iraqi program suggests payments of around $1000 per year -- several times the median Iraqi income. Such a program would create immediate inflation that would offset the value of the payments... but possibly allow Iraqis to import a great deal from their neighbors, maybe.
But that's the point: I don't think anyone knows what effects such a program would have. It seems wiser to simply privatize the Iraqi oil industry and allow the assets to be traded within a free market. Why replace a socialist-facist dictatorship with a welfare state?