Is US pressure on Iraq over reliance on Iranian electricity a blessing in disguise?

Power outages are commonplace in Iraq, which had become highly dependent on Iranian gas and electricity supply. (AFP)
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Updated 27 March 2025
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Is US pressure on Iraq over reliance on Iranian electricity a blessing in disguise?

  • The US has ended a key sanctions waiver, increasing pressure on Iraq to reduce its reliance on Iranian gas and electricity
  • Baghdad is trying to integrate with the GCC power grid to enhance energy security, much to the chagrin of Iran-backed factions

DUBAI/LONDON: Iraq has long had to balance its relationships between competing regional powers, particularly Iran and the Gulf states. Now, with renewed US harrying of Iraq to stop buying gas and electricity from Iran, Baghdad could be drawn further into the Arab orbit.

On March 8, the US State Department said it was not renewing a sanctions waiver that had allowed Iraq to import Iranian electricity. The waiver, initially introduced in 2018 after the US withdrew from the Iran nuclear deal, has been a lifeline for Iraq’s struggling power grid.

Despite its vast oil and gas wealth, years of conflict, corruption, and underinvestment have left Iraq highly dependent on Iranian gas and direct electricity imports to meet its energy needs. Power outages are commonplace, especially in the scorching summer months.




Iraqi laborers work at an oil refinery in the southern town Nassiriya. (AFP/File)

The US decision came as part of President Donald Trump’s “maximum pressure” campaign on Iran, which is “designed to end Iran’s nuclear threat, curtail its ballistic missile program and stop it from supporting terrorist groups,” according to a statement from the US Embassy in Baghdad.

“We urge the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible, and welcome the Iraqi prime minister’s commitment to achieve energy independence,” the statement added.

In a call with Prime Minister Mohammed Shia’ Al-Sudani on March 9, US National Security Adviser Mike Waltz encouraged Baghdad to welcome more Western and US energy companies into Iraq’s oil and gas sectors.

According to a readout from that call, Waltz also urged the Iraqi government to work with the semi-autonomous Kurdistan Regional Government of northern Iraq to address remaining contract disputes over energy and to pay arrears owed to US energy companies.




US National Security Adbviser Michael Waltz. (AFP)

Iranian Foreign Minister Abbas Araghchi took to social media on March 10 to criticize the US move, saying it targeted the people of Iraq by attempting to deprive them of access to basic services such as electricity, particularly ahead of the approaching summer months.

With the waiver rescinded, it remains unclear whether Iraq will be permitted to continue importing gas from Iran to feed its power plants. Indeed, some 43 percent of the country’s electricity is generated from Iranian gas.

On March 12, Farhad Alaaeldin, the Iraqi prime minister’s foreign affairs adviser, told a local TV channel that the waiver guaranteed by the US on the import of gas was still in effect — and that only the exemption on imported power has been canceled.

Alaaeldin said the US was, for now at least, merely encouraging Iraq to secure gas from other sources. “The American administration says … diversify your import sources. Go to other countries,” he said.

The US Embassy statement asserted that electricity imports from Iran represent only 4 percent of electricity consumption in Iraq.

But a spokesperson for Iraq’s Ministry of Electricity, Ahmad Moussa, told the Associated Press that should gas imports also be forbidden, it “would cause Iraq to lose more than 30 percent of its electricity energy.”




On March 6, 2025, Iraq's Ministry of Electricity launched Shams Basra, the country's largest solar energy project, in cooperation with Total Energies. (Iraqi News Agency photo)

Although this renewed pressure on Baghdad has officials scrambling to find alternatives, it arguably presents an opportunity for Iraq to pivot toward the Gulf states, integrate into the Arab fold, and thereby reduce its reliance on Tehran.

The question now is whether the Iraqi government will seize the moment to achieve energy independence or remain tethered to Iran’s energy infrastructure.

Achieving true energy independence will not be easy.

In 2022, Iran exported 3.5 terawatt hours of electricity to Iraq through four transmission lines. Iraq also imports up to 50 million cubic meters of gas per day from Iran. The neighbors signed a five-year extension to their gas export agreement in March 2024.

Talks on Iranian gas exports to Iraq began in the second half of 2010, shortly after the US military withdrawal following the 2003 invasion, leading to the signing of a supply agreement for Baghdad in July 2013. A contract for gas exports to Basra was signed in November 2015.

Iraq spends about $4 billion annually on Iranian energy, but US sanctions have delayed the country’s ability to make timely payments, leading to substantial debt accumulation, estimated at $11 billion.

To settle this debt, Iraq proposed an oil-for-gas deal in 2023, allowing it to repay Iran with crude. However it chooses to make these repayments, this significant debt burden poses a further challenge to severing links.

According to Iraq’s Parliamentary Oil, Gas and Natural Resources Committee, securing alternative sources of energy has proven difficult, with past diversification efforts delayed by bureaucracy and political resistance from Iran-backed factions in Baghdad.

Despite the challenges, Iraq has begun taking concrete steps toward integrating with the Gulf Cooperation Council’s energy network. An Oct. 9, 2024, agreement to connect Iraq to the GCC Interconnection Authority marked a significant milestone.




Iraq’s inclusion in the GCC Interconnection Authority would not only reduce its reliance on Iran but enhance regional energy cooperation. (Supplied)

The GCCIA was originally established to link the power grids of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. Iraq’s inclusion in this grid would not only reduce its reliance on Iranian gas but also enhance regional energy cooperation.

Under the agreement, Iraq will receive 500 megawatts of electricity through transmission lines from Kuwait’s Al-Wafra station to Al-Faw in Basra. A separate deal with Saudi Arabia is expected to add another 1,000 megawatts to Iraq’s power supply.

Given its own significant domestic energy challenges, including infrastructure problems and environmental factors such as droughts that have reduced its hydroelectric output, there is even a case to be made for Iran benefitting from integration into the broader GCCIA grid.

Elsewhere, Iraq has partnered with Saudi Arabia’s ACWA Power, the UAE’s Masdar, and France’s TotalEnergies to develop solar power plants, although these projects are still years away from completion.




Iraq's solar power projects are still years away from completion. ((Shutterstock/file)

Beyond the Gulf grid, Iraq is pursuing additional measures to reduce its dependence on Iranian energy, including an agreement with Turkmenistan in October 2023 to import 20 million cubic meters of gas per day.

Meanwhile, a 115-km transmission line with Turkiye now supplies 300 megawatts of electricity to northern Iraq. Iraq is also building a liquefied natural gas terminal in Al-Faw with a storage capacity of 300,000 cubic meters.

Despite these efforts, Iraq’s transition away from Iranian energy still faces major hurdles.

“The current production of domestic gas cannot replace Iranian imports at this stage, as achieving self-sufficiency requires several years of development and investment,” Iraqi economic analyst Nabil Al-Marsoumi said in a recent social media post.

Even as Iraq moves toward energy diversification, Iran is unlikely to relinquish its grip without resistance.

Tehran exerts significant political influence in Baghdad through Iran-backed militias and Shiite political factions. These groups view stronger GCC ties as a threat to their dominance and have historically opposed efforts to reduce Iraqi dependence on Iranian energy.




Iraq's Prime Minister Mohammed Shia’ Al-Sudani. (AFP)

Prime Minister Al-Sudani initially sought a waiver extension until 2028, arguing that Iraq needed more time to secure alternative energy sources. However, under US pressure, he ultimately relented and announced Iraq’s compliance with sanctions.

His decision sparked criticism from pro-Iranian factions within Iraq, further illustrating the political tightrope he must walk.

Ordinary Iraqis, meanwhile, remain skeptical. Many citizens believe their leaders are beholden to Iran’s interests rather than prioritizing national energy security.

“As long as those in power remain loyal to Iran, they will do whatever it takes to keep us reliant on it,” Modhar, a Baghdad-based driver, told Arab News.

For Gulf states, deepening energy ties with Iraq presents both opportunities and risks. A more integrated Iraq could serve as a bridge between the Arab world and Iran, facilitating broader regional cooperation.

Additionally, stronger economic ties with Baghdad could help Gulf economies diversify their own economies beyond oil exports.

However, Gulf countries must also navigate Iraq’s internal political landscape carefully. Any overt effort to pull Iraq away from Iran risks provoking retaliation from Iran-backed militias, which have launched attacks on US and Gulf interests in the past.




Iraq's new LNG terminal at Al-Faw. (Getty Images)

That said, energy interdependence has the potential to be a stabilizing factor. As regional energy demand grows, a Gulf-wide electricity grid that includes Iraq could provide a reliable supply and reduce dependence on volatile suppliers like Iran.

With the GCC currently producing 272 gigawatts of electricity, a fully integrated power grid could transform Iraq’s economy and cement its position within the Arab fold. How Iraq responds in the coming months will define its future for years to come.

The suspension of the US sanctions waiver has forced Baghdad to confront its reliance on Iranian energy. While the road to energy independence is fraught with challenges, Iraq’s deepening ties with the GCC present a viable alternative.

Whether Iraq can successfully integrate into the GCC’s energy network while balancing its relationship with Iran remains to be seen. However, if Baghdad seizes this historic opportunity, it could finally achieve the energy security and regional influence it has long sought.

As Al-Marsoumi warned: “Key energy projects remain years away from completion.” But the long-term potential of Iraq’s pivot to the GCC is undeniable.

The coming months will determine whether Iraq charts a new course toward the Arab world — or remains in Iran’s shadow.


 


Thousands protest in Iraq against the Iran-Israel war

Updated 20 June 2025
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Thousands protest in Iraq against the Iran-Israel war

  • “No to Israel! No to America!” chanted demonstrators gathered after Friday prayers in the Sadr City district of Baghdad
  • In Iraq's southern city of Basra, around 2,000 people demonstrated after the prayers

BAGHDAD: Thousands of supporters of powerful Iraqi cleric Moqtada Sadr rallied Friday in Baghdad and other cities against Israel’s war with Iran, AFP correspondents said.

“No to Israel! No to America!” chanted demonstrators gathered after Friday prayers in the Sadr City district of Baghdad, Moqtada Sadr’s stronghold in the capital, holding umbrellas to shield themselves from Iraq’s scorching summer sun.

“It is an unjust war... Israel has no right” to hit Iran, said protester Abu Hussein.

“Israel is not in it for the (Iranian) nuclear (program). What Israel and the Americans want is to dominate the Middle East,” added the 54-year-old taxi driver.

He said he hoped Iran would come out of the war victorious, and that Iraq should support its neighbor “with money, weapons and protests.”

In Iraq’s southern city of Basra, around 2,000 people demonstrated after the prayers, according to an AFP correspondent.

Cleric Qusai Assadi, 43, denounced Israel’s use of Iraqi airspace to bomb Iran. “It is a violation of Iraq’s sovereignty,” he said, warning against “a third world war against Islam.”

Echoing the views of Sadr, Assadi said that Iraq should not be dragged into the conflict.

In a statement earlier this week, Sadr condemned “the Zionist and American terrorism” and the “aggression against neighboring Iran, Palestine, Lebanon, Syria and Yemen,” referring to Israel’s military operations in those countries.

Sadr, who once led a militia fighting US-led forces after the 2003 invasion, retains a devoted following of millions among the country’s majority community of Shiite Muslims, and wields great influence over Iraqi politics.

He has previously criticized Tehran-backed Iraqi armed factions, who have threatened US interests in the region if the United States were to join Israel in its war against Iran.

On Friday, Israel launched a surprise attack targeting Iran’s military and nuclear sites and killing top commanders and scientists, saying it was acting to prevent Iran from obtaining a nuclear weapon, an ambition Tehran denies having.

The assault has prompted Iran to retaliate with barrages of missiles aimed at Israel, with residential areas in both countries suffering.

Iraq is both a significant ally of Iran and a strategic partner of Israel’s key supporter, the United States, and has for years negotiated a delicate balancing act between the two foes.

It has only recently regained a semblance of stability after decades of devastating conflicts and turmoil.


Fearful of Iranian missiles, many sleep in Israel’s underground train stations

Updated 24 min 49 sec ago
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Fearful of Iranian missiles, many sleep in Israel’s underground train stations

  • “We’re not sleeping because of the anxiety and because of the sirens that are happening during the nights,” said Shraibmen
  • Melech said the scene, with hundreds of people in their pajamas in the train station, reminded her of her grandfather’s stories from World War II

RAMAT GAN, Israel: Aziza Melech felt her body relax for the first time in days when she settled onto her inflatable mattress in an underground station of Israel’s light rail system on a recent evening.

For the next few hours, at least, the 34-year-old event planner wouldn’t need to run every time a siren warning of Iranian missiles sounded.

Since the war began a week ago with Israel’s airstrikes on Iran, families with young kids, foreign workers, and young professionals have brought mattresses and sleeping bags, snacks and pets into the stations each evening.

Repeatedly running for shelter

On Wednesday night, in a station that straddles Tel Aviv and neighboring Ramat Gan, parents settled in their kids with stuffed animals, while young people fired up tablets loaded with movies.

Many walked in carrying boxes of pizza. Workers set out snacks and coffee.

It was Melech’s first night sleeping in the brightly lit train station, and she was joined by her friend Sonia Shraibmen.

“We’re not sleeping because of the anxiety and because of the sirens that are happening during the nights,” said Shraibmen. “It’s very scary to run every time to the shelter.”

That morning, Shraibmen fell on the street while rushing to a nearby shelter, and decided to move somewhere where she wouldn’t have to get up and run each time her phone blared.

Melech said the scene, with hundreds of people in their pajamas in the train station, reminded her of her grandfather’s stories from World War II. “Now, we’ll be able to tell our grandkids about this,” she said.

The war between Israel and Iran began on June 13, when Israel launched airstrikes targeting Iranian nuclear and military sites as well as top generals and nuclear scientists.

More than 600 people, including over 200 civilians, have been killed in Iran and more than 2,000 wounded, according to a Washington-based Iranian human rights group. People in Tehran have also packed into metro stations as strikes boomed overhead.

Iran has retaliated by firing 450 missiles and more than 1,000 drones at Israel, according to Israeli army estimates. Those strikes have killed have killed 24 people and injured hundreds in Israel. Missiles have struck 40 different sites, including apartment buildings, offices and a hospital, according to authorities.

Footage of pancaked buildings or apartment towers with faces sheared off has forced some people to reconsider what they do when a siren blares.

The Tel Aviv light rail, which is not running because of the war, has several underground stations. In addition to the hundreds who sleep in them each night, thousands of others come only when there’s a siren, crowding into every part of the station not taken up by mattresses.

Those living older apartments lack shelter

Around half of the nighttime residents at the train station are foreign workers, who often live in older apartment buildings that are often not equipped with adequate shelters.

While new buildings in Israel are required to have reinforced safe rooms meant to withstand rockets, Iran is firing much stronger ballistic missiles. And shelter access is severely lacking in poorer neighborhoods and towns, especially in Arab areas.

Babu Chinabery, a home health aide from India, said he went to the station ”because we are very scared about the missiles because they’re so strong.”

Chinabery, 48, has been in Israel for 10 years, so he is no stranger to the sirens. But the past week has been something different. “It’s very difficult, that’s why we’re coming to sleep here,” he said.

The light rail stations aren’t the only places people have sought shelter.

Around 400 people also sleep in an underground parking garage at one of the city’s biggest malls each night, according to organizers. Mutual aid groups set up more than 100 tents, each one in a parking space, providing a bit more privacy for people who wanted to sleep in a safe area.

Tel Aviv’s Central Bus Station — a half-abandoned cement behemoth — also opened its underground atomic shelter to the public for the first time in years.

While likely one of the safest places in Israel during a missile attack, the creepily deserted rat- and cockroach-infested shelter, filled with standing water from leaky pipes, attracted only a handful of curious onlookers during the day and no residents at night.

Not taking ‘unnecessary risks’

Roi Asraf, 45, has been sleeping at the train station in Ramat Gan for the past few nights with his wife and 3-year-old daughter, even though they have a safe room at home.

“I don’t like to take unnecessary risks,” he said.

They now have the routine down: They give their daughter a bath at home, get everyone in their pajamas, and walk to the train station by 7 p.m. Local volunteers have run a nightly show for kids to help settle them before sleep.

“I hope (the conflict) will be short and quick,” said Asraf, after his daughter, Ariel, bounded off with her mom to catch the show. Despite the difficulties, he supports Israel’s attack on Iran.

“If I have to sleep a week of my life in a train station for everything to be safer, I’m willing to do it,” he said.


Libya objects to Greek tender for hydrocarbon exploration off Crete

Updated 20 June 2025
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Libya objects to Greek tender for hydrocarbon exploration off Crete

  • Greece opposed the agreement, saying it had no legal basis
  • Last month Athens invited bidders for hydrocarbon exploration in two blocks south of Crete

TRIPOLI: Libya’s internationally recognized government of national unity has objected to Greece’s approval of an international tender for hydrocarbon exploration off the island of Crete, saying some of the blocks infringed upon its own maritime zones.

The two countries have been trying to mend relations strained by an accord signed in 2019 between the Libyan government and Greece’s regional rival Turkiye, which mapped out a sea area between them close to the Greek island.

Greece opposed the agreement, saying it had no legal basis as it sought to create an exclusive economic zone from Turkiye’s southern Mediterranean shore to Libya’s northeast coast, ignoring the presence of Crete.

Last month Athens invited bidders for hydrocarbon exploration in two blocks south of Crete following an expression of interest by US major Chevron.

Libya’s Tripoli-based foreign ministry said in a statement late on Thursday that some of the tendered sea blocks off Crete fell within disputed zones and were “a clear violation of Libya’s sovereign rights.”

The ministry objected “to any exploration or drilling activities in these areas without a prior legal understanding that respects the rules of international law,” it said, calling on Greek authorities to prioritize dialogue and negotiation.

Responding to questions at the Greek parliament, Greek Foreign Minister George Gerapetritis said Greece was willing to discuss with Libya “the delimitation of maritime zones within the framework of international law.”

Gerapetritis is expected to visit Libya in the coming weeks, an official with the Greek foreign ministry told Reuters on condition of anonymity.


Israeli defense minister warns Hezbollah against joining conflict with Iran

Updated 20 June 2025
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Israeli defense minister warns Hezbollah against joining conflict with Iran

  • Hezbollah has made no explicit pledge to join the fighting

JERUSALEM: Israeli Defense Minister Israel Katz warned Lebanon’s Hezbollah to exercise caution on Friday, saying Israel’s patience with “terrorists” who threaten it had worn thin.

The head of Iran-backed Hezbollah, Naim Qassem, said on Thursday that the Lebanese group would act as it saw fit in the face of what he called “brutal Israeli-American aggression” against Iran.

In other statements, the group has made no explicit pledge to join the fighting and a Hezbollah official told Reuters last week that the group did not intend to initiate attacks against Israel.


Gaza rescuers say 43 killed by Israeli forces

Updated 20 June 2025
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Gaza rescuers say 43 killed by Israeli forces

  • Civil defense official says 26 people killed while gathered near aid distribution center

GAZA CITY: Gaza’s civil defense agency said Israeli forces killed at least 43 people on Friday, including 26 who had gathered near an aid distribution center, the latest in a string of deadly incidents targeting aid seekers in the Palestinian territory.
“Forty-three martyrs have fallen as a result of the ongoing Israeli bombardment on the Gaza Strip since dawn today, 26 of whom were waiting for humanitarian aid,” Mohammad Al-Mughayyir, director of medical supply at the civil defense agency in Gaza, told AFP.