U.S. Ends Iraq’s Sanctions Waiver for Iranian Electricity Imports
The United States has decided not to renew a sanctions waiver that previously allowed Iraq to purchase electricity from Iran, according to a spokesperson from the U.S. embassy in Baghdad.
Despite Iraq’s vast oil and gas reserves, the country still relies heavily on imports, with Iran supplying a significant portion of its electricity and gas.
Impact on Iraq’s Energy Supply
Iraq has been working towards energy independence, aiming to meet its own power needs by 2028. However, the expiration of this waiver poses new challenges for its electricity sector.
“On March 8, the U.S. Department of State decided against renewing Iraq’s waiver to purchase Iranian electricity,” the embassy spokesperson confirmed.
The move is part of Washington’s broader efforts to limit Iran’s economic activities. “This decision ensures Iran does not receive any financial relief,” the spokesperson added.
While the statement focused on electricity, it did not address the status of gas imports, which remain crucial for Iraq’s power generation.
A Longstanding Policy Shift
The sanctions waiver was first introduced in 2018 when the U.S. reinstated economic restrictions on Iran following the withdrawal from the nuclear agreement under former President Donald Trump.
Since returning to office, Trump has revived his “maximum pressure” strategy against Iran, aimed at curbing its nuclear ambitions and regional influence.
“The President’s policy is focused on ending Iran’s nuclear threat, limiting its ballistic missile development, and disrupting support for terrorist organizations,” the U.S. embassy spokesperson stated.
Describing Iran as “an unreliable energy partner,” the U.S. has urged Iraq to speed up efforts to diversify its energy sources.
Iraq’s Energy Crisis and Future Plans
Years of conflict have left Iraq’s infrastructure in poor condition, leading to widespread power shortages. During the scorching summer months, when temperatures soar past 50°C (122°F), many households receive only a few hours of electricity daily. Those who can afford it rely on private generators.
Frequent supply disruptions from Iran have worsened the crisis, leaving millions of Iraqis without consistent power.
Iraq’s government, anticipating the end of the waiver, has explored alternative strategies, including tapping into gas supplies via offshore platforms connected to Basra’s power stations.
Energy expert Yesar Al-Maleki noted that “Iranian electricity has never been a reliable source,” citing Iraq’s struggles to process payments due to sanctions on Iran’s banking sector. Tehran has also prioritized meeting its own growing energy demand.
While Iraq has reduced its reliance on Iranian electricity over the past three years, the end of the waiver adds further pressure. To bridge the gap, the country is considering boosting electricity imports from Turkey and independent power providers in the Kurdistan region.
Next Steps for Iraq
Iraq has been expanding its energy partnerships, securing electricity imports from Jordan and Turkey while working to connect to the Gulf Cooperation Council’s power grid.
One of its major initiatives involves capturing and utilizing flared gas—an effort aimed at reducing pollution while increasing domestic gas production. The government has set a target to end gas flaring by 2027, which could help reduce dependence on external energy sources.
The U.S. decision only affects electricity imports for now, but it remains uncertain whether similar measures will be extended to gas imports in the future.
