Iraq Rebuffs U.S. Demands to Stop Buying Energy by Iran

Even with which, Iraq includes a shortfall of three gigawatts of power.

Last May, around the time Mr. Trump announced the withdrawal by the Iran nuclear deal, Iraqi officials stopped paying Iran for natural gas as well as electricity. which was in part because they feared the United States was about to impose sanctions, as well as their lawyers wanted to look at Iraq’s exposure, said a State Department official, who discussed details of the sensitive diplomatic issue on condition of anonymity.

Last July as well as August, having not been paid, Iran stopped electricity exports to Iraq. which contributed to widespread blackouts inside southern city Basra, already common during the summer, as well as helped ignite protests. Iran restarted exports on Aug. 20, yet the protests continued, as well as some residents burned the Iranian Consulate in September.

Iran has since continued its exports of natural gas as well as electricity to Iraq as well as expects to be paid. Officials by both countries are negotiating how to make payments, given the American sanctions. The Trade Bank of Iraq could have sanctions placed on which by the United States if which buys natural gas or, under the temporary electricity waiver, pays for electricity in United States dollars, the State Department official said.

Iraqi officials met with Treasury Department officials in Washington twice in late 2018 to discuss how to legally make payments. A critical period will come This particular summer, when electricity demand will surge again. If Iran cuts supplies because of nonpayment, more protests could occur, destabilizing the country.

For a long-term solution, the Trump administration is usually urging Iraqi officials to connect their grid to Saudi Arabia, Jordan or Kuwait.

They are also pushing Baghdad to sign contracts with foreign companies for natural-gas capture, processing as well as transport to use gas which is usually lost during crude oil production. Iraq has 1.7 billion cubic feet of gas flaring per day across 30 fields. the planet Bank has worked with the Oil Ministry For two main years to improve legal as well as regulatory foundations for gas contracts.

yet which is usually not a short-term fix for energy shortfalls, as well as Iraq has been slow in signing contracts. Last year, Iraq signed one particular natural-gas processing contract, with Baker Hughes as well as General Electric. The product could equal only a fraction of the imports by Iran, as well as which could take at least two years to come online.