The United States has discontinued waivers for Iraq’s electricity imports from Iran, leading to concerns about the country’s power grid stability due to its reliance on Iran for 22% of gas and electricity. Experts warn of potential energy shortages causing unrest, prompting Iraq to seek liquid fuel alternatives and improve regional energy partnerships, while tensions with the Kurdistan Regional Government over oil contracts remain unresolved.
The United States has decided not to renew waivers for Iraq’s electricity imports from Iran, utilizing the opportunity to assert its sanctions regime. The dependency on Iranian energy is significant, with Iraq sourcing 22% of its electricity and gas from Iran, raising concerns about the nation’s energy sustainability. The Middle East managing director of FGE, Iman Nasseri, expressed that Iraq’s payment mechanisms could face sanctions if found in violation of US restrictions.
Experts predict potential disruptions in supply chains as Iraq’s reliance on Iranian gas is critical. The Iraqi Electricity Ministry estimates that the electricity grid could experience over a 30% drop in capacity if gas imports are impaired. Ahmed Moussa, a spokesperson for the Ministry, indicated that energy shortages may lead to unrest, especially in Basra, where previous outages have sparked protests.
To counterbalance the potential shortages, an FGE analysis suggests transitioning to liquid fuels. In response, Iraq has requested an increase in fuel oil supplies from the Oil Ministry, raising allocations to 100,000 barrels per day from a previous 35,000. Additionally, Iraq is working on expanding its electricity connections with Saudi Arabia and investing in associated gas resources to lessen its dependency on Iranian imports.
The US decision aligns with President Trump’s strategy of maximum pressure on Iran, aimed at curbing its nuclear ambitions and support for terrorism in the region. National Security Advisor Mike Waltz emphasized the need for Iraq to bolster ties with American energy firms and collaborate with the Kurdistan Regional Government (KRG) to reopen the Iraq-Turkiye pipeline, which has been closed for two years due to ongoing disputes between Baghdad and Erbil.
Efforts for dialogue between Baghdad and Erbil to settle lingering issues related to payment systems and oil contracts have not achieved resolution, despite two rounds of negotiations. An anonymous source from one involved oil company remarked that “while tensions persist, there remains a possibility of compromise.”
In conclusion, as the United States ceases waivers for Iraq’s electricity imports from Iran, the Iraqi government faces critical energy challenges that may disrupt its grid system, leading to potential unrest. Plans to transition to liquid fuels and enhance partnerships with neighboring countries are underway. Yet, unresolved disputes between Baghdad and Erbil regarding oil contracts underscore the complexities of Iraq’s energy landscape in this shifting geopolitical context.
Original Source: shafaq.com
