Baghdad-Washington relationship undermined by electricity cooperation deal with Iran

The U.S. has impelled the Iraqi government to refrain from purchasing energy resources from neighbouring Iran. The Iraqi government is heavily dependent on Iranian energy imports. Tehran is the exclusive supplier of natural gas and electricity to Baghdad. The Middle Eastern republic cannot permit a further shortfall in energy resources. As a result of the decade-long internal political strife, the country’s electricity infrastructure has been heavily damaged and several areas of the Iraqi periphery suffer from an electricity shortage problem. This pressing issue overlaps with the present sanctions regime against Iranian energy exports.

Iraq is the most recent addition to states which have started objecting to the toughening of existing sanctions regime to Iran. Iraq appears to embrace European frame of thinking which only recently established the INSTEX mechanism to facilitate non-dollar trade with Iranian companies. Similar initiatives have also been undertaken by China and India to retain their energy imports from Iran uninterrupted as long as the international sanctions regime is in place.

Iraq’s energy capabilities have been crippled since the 2003 military intervention, with electricity being the rarest energy resource. Blackouts are typical of Iraqi cities especially during summertime when shortages peak. The unstable electricity grid system currently imports more than 1.2 gigawatts of electricity from Iran to cope with daily energy requirements. In previous years, electricity interruptions fuelled mass rallies in Iraqi cities – an incident which may possibly entrap the country in a never-ending political turmoil cycle. In the first week of February Iranian and Iraqi energy authorities renewed their electricity cooperation frameworks, pledging Tehran to build a new power plant in Iraqi soil in due course. The U.S. government reacted by issuing an ultimatum to the Iraqi government to stop electricity and gas imports from Iran by end of March.


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