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.


 


Israeli navy strikes Yemen’s port of Hodeidah, army radio says

Updated 16 sec ago
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Israeli navy strikes Yemen’s port of Hodeidah, army radio says

DUBAI: The Israeli navy carried out attacks on Yemen’s Red Sea port of Hodeidah, Israeli army radio said on Tuesday, in an ongoing campaign that usually involves airstrikes.
Houthi-run Al Masirah TV said Israel targeted the docks of Al Hodeidah port with two strikes.
There were no immediate reports of casualties.
The strikes come after the Israeli military on Monday urged the evacuation of the Houthi-controlled ports of Ras Isa, Hodeidah, and Salif.
Since the start of the war in Gaza in October 2023, the Iran-aligned Houthis have fired at Israel and at shipping in the Red Sea in what it says are acts of solidarity with the Palestinians.
Most of the dozens of missiles and drones fired toward Israel have been intercepted or fallen short. Israel has carried out a series of retaliatory strikes.
Israel has severely weakened other allies of Iran in the region — Lebanon’s Hezbollah and the Palestinian militant group Hamas.
The Tehran-backed Houthis and pro-Iranian armed groups in Iraq are still standing. 


Trump must tell Netanyahu ‘enough is enough’: ex-Israeli PM

Updated 10 June 2025
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Trump must tell Netanyahu ‘enough is enough’: ex-Israeli PM

  • US President Donald Trump should tell Israel’s leader Benjamin Netanyahu “enough is enough,” a former Israeli prime minister told AFP,

PARIS: US President Donald Trump should tell Israel’s leader Benjamin Netanyahu “enough is enough,” a former Israeli prime minister told AFP, denouncing the continuation of the war in Gaza as a “crime” and insisting a two-state solution is the only way to end the conflict.
Ehud Olmert, prime minister between 2006-2009, said in an interview in Paris that the United States has more influence on the Israeli government “than all the other powers put together” and that Trump can “make a difference.”
He said Netanyahu “failed completely” as a leader by not preventing the October 7, 2023 attack by Palestinian militant group Hamas that sparked the war.
He said while the international community accepted Israel’s right to self-defense after October 7, this changed when Netanyahu spurned chances to end the war in March and instead ramped up operations.
Netanyahu “has his personal interests which are prioritized over what may be the national interests,” Olmert charged.
Analysts say Netanyahu fears that if he halts the war, hard-line members of his coalition will walk out, collapsing the government and forcing elections he could lose.
“If there is a war which is not going to save hostages, which cannot really eradicate more of what they did already against Hamas and if, as a result of this, soldiers are getting killed, hostages maybe get killed and innocent Palestinians are killed, then to my mind this is a crime,” said Olmert.
“And this is something that should be condemned and not accepted,” he said.
Trump should summon Netanyahu to the White House Oval Office and facing cameras, tell the Israeli leader: “’Bibi: enough is enough’,” Olmert said, using the premier’s nickname.
“This is it. I hope he (Trump) will do it. There is nothing that cannot happen with Trump. I don’t know if this will happen. We have to hope and we have to encourage him,” said Olmert.
Despite occasional expressions of concern about the situation in Gaza, the US remains Israel’s key ally, using its veto at the UN Security Council and approving billions of dollars in arms sales.


Hamas’s unprecedented attack on Israel resulted in the deaths of 1,219 people, mostly civilians, according to an AFP tally based on official figures.
Militants abducted 251 hostages, 54 of whom remain in Gaza, including 32 the Israeli military says are dead.
Israel’s retaliatory offensive has killed 54,880 people, mostly civilians, according to the Gaza health ministry, figures the United Nations deems reliable.
Along with former Palestinian foreign minister Nasser Al-Qidwa, Olmert is promoting a plan to end decades of conflict between Israel and the Palestinians to create a Palestinian state alongside a secure Israel.
Both sides would swap 4.4 percent of each other’s land to the other, according to the plan, with Israel receiving some West Bank territory occupied by Israeli settlers and a future Palestinian state territory that is currently part of Israel.
Ahead of a meeting this month in New York co-hosted by France and Saudi Arabia on steps toward recognizing a Palestinian state, Olmert said that such a plan is “practical, is doable, is relevant, is valid and is real.”
Olmert spent over a year in prison from 2016-2017 after being convicted in corruption scandals that ended his political career and efforts to forge peace.
A longtime political rival of Netanyahu even though they both emerged from the same Likud right-wing party, he also faces an uphill struggle to convince Israeli society where support for a Palestinian state, let alone land swaps, is at a low ebb after October 7.
“It requires a leadership on both sides,” said Olmert. “We are trying to raise international awareness and the awareness of our own societies that this is not something lost but offers a future of hope.”
Al-Qidwa, who is due to promote the plan alongside Olmert at a conference organized by the Jean-Jaures Foundation think tank in Paris on Tuesday, told AFP the blueprint was the “only game in town and the only doable solution.”
But he said societies in Israel and the Palestinian territories still had to be convinced, partly due to the continuation of the war.
“The moment the war comes to an end we will see a different kind of thinking. We have to go forward with acceptance of the co-existence of the two sides.”
But he added there could be no hope of “serious progress with the current Israeli government and current Palestinian leadership” under the aging president Mahmud Abbas, in office now for two decades.
“You have to get rid of both. And that is going to happen,” he said, labelling the Palestinian leadership as “corrupt and inept.”


UN says most flour delivered in Gaza looted or taken by starving people

Updated 10 June 2025
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UN says most flour delivered in Gaza looted or taken by starving people

  • Experts warn Gaza is at risk of famine, with the rate of young children suffering acute malnutrition nearly tripling
  • According to World Food Programme guidelines, 4,600 metric tons of flour would provide roughly eight days’ worth of bread for Gaza’s 2 million residents, based on a standard daily ration of 300 grams per person

UNITED NATIONS: The United Nations said on Monday that it has only been able to bring minimal flour into Gaza since Israel lifted an aid blockade three weeks ago and that has mostly been looted by armed gangs or taken by starving Palestinians.
The organization has transported 4,600 metric tons of wheat flour into Gaza via the Kerem Shalom crossing, the only entry point Israel allows it to use, Deputy UN spokesperson Fahan Haq told reporters.
Haq said aid groups in Gaza estimate that between 8,000 and 10,000 metric tons of wheat flour were needed to give each family in Gaza a bag of flour and “ease the pressure on markets and reduce desperation.”

HIGHLIGHTS

• US-backed GHF says has given out total 11.4 million meals

• UN calls for more supplies to be let into Gaza

• Gazans at risk of famine

“Most of it was taken by desperate, starving people before the supplies reached their destinations. In some cases, the supplies were looted by armed gangs,” Haq said.
According to World Food Programme guidelines, 4,600 metric tons of flour would provide roughly eight days’ worth of bread for Gaza’s 2 million residents, based on a standard daily ration of 300 grams per person.
Haq called for Israel to let in far more aid via multiple crossings and routes.
The UN has mostly delivered flour along with limited medical and nutrition items since Israel lifted the 11-week blockade in mid-May. Experts warn Gaza is at risk of famine, with the rate of young children suffering acute malnutrition nearly tripling.
Israel and the United States want the UN to work through the controversial new Gaza Humanitarian Foundation, but the UN has refused, questioning its neutrality and accusing the distribution model of militarizing aid and forcing displacement.
Israel and the United States have accused Hamas of stealing aid from the UN-led operations, which the militants deny.
The GHF uses private US security and logistics firms to operate. It began operations in Gaza on May 26 and said on Monday so far it has given out 11.4 million meals.
Israel makes the UN offload aid on the Palestinian side of the Kerem Shalom crossing, where it then has to be picked by the UN and aid groups already in Gaza. The UN has accused Israel of regularly denying access requests.

 


Trump says Iran is involved in Gaza hostage negotiations

Updated 10 June 2025
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Trump says Iran is involved in Gaza hostage negotiations

  • Under the proposal 28 Israeli hostages — alive and dead — would be released in the first week, in exchange for the release of 1,236 Palestinian prisoners and the remains of 180 dead Palestinians
  • The United States and Iran are also separately trying to negotiate a deal on Tehran’s nuclear program

WASHINGTON: US President Donald Trump said on Monday Iran is involved in negotiations aimed at arranging a ceasefire-for-hostages deal between Israel and Hamas.
“Gaza right now is in the midst of a massive negotiation between us and Hamas and Israel, and Iran actually is involved, and we’ll see what’s going to happen with Gaza. We want to get the hostages back,” Trump told reporters during an event in the White House State Dining Room.
Trump did not elaborate and the White House did not immediately respond to a request for details of Iran’s involvement. Iran’s mission to the United Nations in New York did not immediately respond to a request for comment.
The United States has proposed a 60-day ceasefire between Israel and Hamas. Israel said it would abide by the terms but Hamas thus far has rejected the plan.
Under the proposal 28 Israeli hostages — alive and dead — would be released in the first week, in exchange for the release of 1,236 Palestinian prisoners and the remains of 180 dead Palestinians.
The United States and Iran are also separately trying to negotiate a deal on Tehran’s nuclear program.
 

 


Gaza’s Al-Amal hospital ‘virtually out of service’: WHO

Updated 10 June 2025
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Gaza’s Al-Amal hospital ‘virtually out of service’: WHO

  • The WHO said June 5 that Al-Nasser and Al-Amal hospitals were unable to fully treat the wounded that continue to pour in because of serious shortages of medicines and medical supplies after two months of total blockade

GENEVA: The Al-Amal Hospital in Gaza, one of the few still operating in the Palestinian territory, is now “virtually out of service” due to intense military activity, the head of the WHO said Monday.
“Access to the hospital is obstructed, preventing new patients from reaching care, and leading to more preventable deaths,” the World Health Organization’s director-general Tedros Adhanom Ghebreyesus posted on X.
Tedros said two emergency medical teams — one local, the other international — “are still doing their best to serve the remaining patients with the limited medical supplies left on the premises.”
“With the closure of Al-Amal, Nasser Medical Complex is now the only remaining hospital with an intensive care unit in Khan Younis,” he said.
The WHO said June 5 that Al-Nasser and Al-Amal hospitals were unable to fully treat the wounded that continue to pour in because of serious shortages of medicines and medical supplies after two months of total blockade.
Israeli authorities have recently allowed in some humanitarian aid, but way less than what is needed.
Nearly 20 months of relentless war, triggered by Hamas’ October 7, 2023 attacks on Israel, has created one of the most serious humanitarian crises in the world, with civilians exhausted by bombardments, forced displacement and hunger.