Iraq’s electrical grid has for years been dependent on gas imports from Iran to run its power generation plants, with Baghdad remaining overly reliant on Tehran despite plans by Iraqi Prime Minister Mohammed Shia’ al-Sudani to develop the country’s gas sector and achieve self-sufficiency within the next five years.
The Coordination Framework “calls on the Iraqi government, through the ministry of foreign affairs, to contact the American side and urge it to immediately unfreeze the financial dues originating from the import of Iranian gas.”
The pro-Iran coalition also urged not using this file politically as it might negatively affect the people of Iraq.
In a meeting with US Secretary of State Antony Blinken in Riyadh in June, Iraqi Foreign Minister Fuad Hussein raised the matter of difficulties in paying funds owed to Iran for purchases of gas and electricity given strict US with sanctions on financial transactions with Iran. Tehran announced that $2.7 billion of frozen Iranian assets were released from Iraq two days after the meeting.
"Since 2018 the Department of State has provided a number of waivers... in consultation with Congress that allow Iraq to pay for electricity imports from Iran, by transferring funds into a restricted account in Iraq. Consistent with U.S. sanctions, these funds can only be accessed for humanitarian and other non-sanctionable transactions," US State Department Spokesperson Matthew Miller told reporters in late June, adding that Washington continues to approve the transactions on a case-by-case basis.
Yahya Al-e Es'hagh, chairman of the Iran-Iraq Joint Chamber of Commerce, on Tuesday said that Iraq has released all of Iran’s frozen assets which amounts to around $10 billion worth of energy debts. Iran has confirmed that Iraq has paid off all its gas arrears to the Islamic republic, but stressed that sometimes there are problems in transferring the money from the Trade Bank of Iraq (TBI) to Tehran.
Iraq’s electricity ministry on Tuesday announced that the country had lost nearly five thousand megawatts of power due to Iran completely stopping the supply of gas to the southern region of Iraq, as well as cutting down the exports to Baghdad and central Iraq from 45 million cubic meters to 20 million cubic meters.
Iranian state media on Tuesday said that Iran had exported 9.4 billion cubic meters of gas to Iraq in 2022, citing a report from the UK-based Energy Institute.
Despite its large oil and gas reserves, Iraq suffers from chronic electricity shortages, especially felt when summer temperatures reach over 50 degrees Celsius.
Iraqi officials have said it would be impossible to sever ties with Iran in order to comply with US sanctions, and Baghdad was granted a waiver by the US to continue imports from Tehran.
