Energy-dependent Iraq gets new US waiver to import Iranian gas

Baghdad relies on gas and electricity imports from its neighbour Tehran to supply about a third of its electricity sector, worn down by years of conflict, corruption and poor maintenance.
Thursday 24/09/2020
An Iraqi employee turns a valve at the Nahr Bin Omar natural gas field, north of the southern port of Basra. (AFP)
An Iraqi employee turns a valve at the Nahr Bin Omar natural gas field, north of the southern port of Basra. (AFP)

BAGHDAD--The US has granted Iraq a 60-day extension to a sanctions waiver allowing it to import Iranian gas for its crippled power grids, Iraqi officials said.

Baghdad relies on gas and electricity imports from its neighbour Tehran to supply about a third of its electricity sector, worn down by years of conflict, corruption and poor maintenance.

The US blacklisted Iran’s energy industry in late 2018 but has since granted Baghdad a series of temporary waivers to stave off country-wide blackouts.

In May, Washington granted Iraq a four-month extension as a gesture of good will towards Mustafa al-Kadhimi, who had just formed a cabinet seen as more US-friendly than its predecessor.

An Iraqi worker checks an electricity generator grid in Baghdad. (AP)
An Iraqi worker checks an electricity generator grid in Baghdad. (AP)

The US has pressured Iraq to use the waivers to become independent from Iranian energy, specifically by partnering with American firms, and had been frustrated by the slow progress under the previous premier, Adel Abdul-Mahdi.

While Kadhimi’s cabinet has sought to fast-track such deals, it has been unable stem the near-daily rocket and IED attacks on Western military and diplomatic interests.

On his trip to Washington in August, Kadhimi signed agreements with various US firms for energy development across Iraq, including Chevron, Baker Hughes, Exxon and General Electric.

As OPEC’s second-biggest producer, Iraq relies on crude exports to fund more than 90% of its state budget, but this year’s price collapse has seriously undermined the government’s fiscal position.

In a further blow, coronavirus has spread across the country, with more than 332,000 confirmed cases and 8,754 deaths announced by the health ministry.