Considering what a bum history Iraq has had for the past 100 years or so, I thought it would be nice to imagine a an alternate timeline where they were instead the powerhouse of the Middle East. What I'm thinking is an Iraq that looks something like this by the present day:
Seems crazy at first glance, huh? It isn't really though, at least in my opinion. What needs to be done I believe is first and foremost is for Iraq to have far more competent rulers throughout the 20th century. Better rule during the British mandate period as well as the 30s and 40s. Have King Faisal survive until...say until the mid-1950s. Not too difficult: He was only 50 when he died. No coups during the 30s and no pro-Nazi coup in 41 as a result of a strong King being on the throne.
Mostly historical unification of Jordan and Iraq in 1958, except it lasts with Qassim's coup either being butterflied away or failing. If it fails, then King Faisal II could exaggerate the danger of the Monarchy's overthrow by pro-Soviet conspirators to scare the British and Americans into giving Iraq greater material support.
He may also be able to convince the British to turn Kuwait over to Iraq rather than granting it independence. It may be tough, but if he indicates Iraq is willing to fight for it, they may back off out of fear of weakening the Monarchy and causing a pro-Soviet coup at the instigation of Egypt or Syria. In any case, gaining Kuwait peacefully is preferable, though they might have to still combat pro-Al-Sabah insurgents for a bit.
Next, I believe Iraq and Saudi Arabia had some sort of dispute regarding their southern(from Iraq's POV) borders. If I'm mistaken please correct me, but this might have become agitated again, and could have eventually lead to war between the two, if circumstances line up properly. If it's sometime in the late 60s or anywhere in the 70s, then Iraq should get away with imposing harsh terms on them, so long as they are still pro-western.
And of course the Iranian territory is easy. Just have a similar Iranian Revolution break out at some point. Iraq, already much stronger than in OTL, invades and takes Iran's western oilfields and all Sunni/Arab regions.
How can the rough outline I just gave you be made to work? And how do you think this state would be viewed by the rest of the world by the modern day? Especially by the rest of the Arab and Muslim world, and by the major global powers.