Iraq Faces Power Crisis with End of US Sanctions Waiver

BAGHDAD — The United States has opted not to extend a crucial waiver permitting Iraq to purchase electricity from Iran without violating sanctions, according to a U.S. official.
The prior waiver ended on Saturday, as confirmed by a statement from the U.S. embassy in Baghdad. This move aligns with President Donald Trump’s “maximum pressure campaign” targeting Iran, aiming to neutralize Iran’s nuclear threat, restrict its ballistic missile activities, and halt its support for terrorist organizations.
“We encourage the Iraqi government to minimize its reliance on Iranian energy sources promptly, in line with the Iraqi Prime Minister’s pledge to attain energy independence,” the statement elaborated.
Iraq, despite its abundance of oil and gas resources, continues to endure severe electricity shortages due to years of war, rampant corruption, and mismanagement. Consequently, it heavily depends on importing gas and electricity from Iran to satisfy its power needs.
Frequent power outages are a common occurrence, particularly during the intense summer months. Many Iraqi citizens are compelled to use diesel generators or endure heat exceeding 50 degrees Celsius (122 degrees Fahrenheit).
The recently expired waiver pertained to direct electricity imports, and it remains uncertain whether Iraq can still procure gas from Iran for its power plants.
The U.S. embassy highlighted that imports from Iran only account for 4% of Iraq’s total electricity consumption. However, Iraq’s Ministry of Electricity spokesperson, Ahmad Moussa, cautioned that a halt to gas imports could result in a loss of over 30% of Iraq’s electrical energy and mentioned that the government is exploring alternative solutions.
Moussa further explained that Iranian gas supplies to power plants in Baghdad and the central Euphrates region have been inactive for the past two months, and southern power plants have faced unreliable supply.
A senior official from the electricity ministry, requesting anonymity due to the lack of official communication on the gas import decision, stated that Iraq could potentially lose approximately 8,000 megawatts of energy from stations relying on Iranian gas and an additional 500 megawatts of electricity supplied directly from Iran.
There exists an account in Iraq with roughly 7.5 billion euros allocated for the payment of Iranian gas, of which 6.5 billion euros have been distributed since the beginning of the year. These funds are restricted in their application and are only disbursed for Iran’s purchases of food, medicine, or other humanitarian essentials.