The U.S. has halted waivers for Iranian energy, impacting Iraq’s electricity supply. With 22% reliance on Iranian gas, Iraq risks power shortages and unrest. Alternative measures, including transitioning to liquid fuels and enhancing regional connections, are being explored. The U.S. insists on Iraq collaborating with its energy firms amidst ongoing negotiations with the KRG.
The United States has decided not to renew energy waivers for Iran, affecting only electricity imports, according to FGE. Iraq currently depends on Iran for 22% of its total gas and electricity imports, raising concerns about the sustainability of its power grid amidst these changes.
Iman Nasseri, FGE’s Middle East managing director, cautioned that while gas imports themselves are technically exempt, the U.S. could impose sanctions on Iraq’s financial mechanisms if they breach any sanctions. There is a significant risk that Iraq’s critical reliance on Iranian gas could disrupt supply chains.
According to Ahmed Moussa, spokesperson for the Iraqi Electricity Ministry, the country’s electricity grid might lose over 30% of its capacity should gas imports be impacted, potentially leading to energy shortages and civil unrest, particularly in Basra, where prior blackouts have sparked protests.
The FGE analysis suggests that augmenting liquid fuel consumption could alleviate some of this crisis. Iraq has requested that the Oil Ministry boost fuel oil supplies from 35,000 to 100,000 barrels per day to help manage this transition.
Additionally, the Iraqi government aims to enhance its electricity grid connections with Saudi Arabia and escalate investments in associated gas as strategies to lessen its dependence on Iranian imports.
The cessation of waivers aligns with the U.S. “maximum pressure” approach to Iran, as highlighted by National Security Advisor Mike Waltz, who indicated that pressure would intensify if Iran continued its nuclear ambitions and support for regional terrorism.
Waltz further stressed the need for Iraq to collaborate with U.S. energy firms and urged cooperation with the Kurdistan Regional Government (KRG) to reopen the Iraq-Turkiye pipeline, which has faced closure for two years due to conflicts between Baghdad and Erbil.
Despite diplomatic efforts, two sets of negotiations between Baghdad and Erbil have not resolved outstanding issues regarding payment mechanisms and oil contracts. An anonymous source from the discussions mentioned that although tensions remain high, there is still a chance for a compromise.
Iraq faces significant energy challenges following the U.S. decision to cut Iran energy waivers, which threatens its electricity supply due to over-reliance on Iranian imports. Efforts are underway to bolster liquid fuel usage and enhance connections with neighboring countries. However, the geopolitical strain between Baghdad and Erbil complicates Iraqi energy security, inducing fears of future protests due to anticipated power shortages.
Original Source: shafaq.com
