Iraq resists US pressure to cut down on Iranian gas imports

Iraq is one of the major Iranian gas clinets to feed its power plants that general electricity for millions of its inhabitants.

11 September 2019
ID : 22206
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Iraq is one of the major Iranian gas clinets to feed its power plants that general electricity for millions of its inhabitants.

An undated photo shows a man moving Iran and Iraq flags before a press conference between countries officials.

Iraq will struggle to generate enough electricity unless it continues to use Iranian gas for three to four more years, the electricity minister said on Tuesday, resisting US pressure to stop the imports from its neighbor, Financial Tribune reports. 

Iranian oil exports have tumbled since the United States imposed new sanctions on Iran this year, Reuters reported.

Iraq has a US waiver to import Iranian gas, but Washington has been pressing Baghdad to phase them out.

“At the end of the day it is an open market,” Electricity Minister Luay al Khateeb told reporters on the sidelines of the 24th World Energy Congress, 9-12 September, in Abu Dhabi.

“The issue of electricity is regularly becoming a political affair in Iraq.”

Power cuts in Iraq have often prompted protests against the authorities. Iran supplies enough gas to power 2,500 megawatts, as well as providing Iraq with 1,200 MW in direct power supplies.

The minister said Iraq now had capacity for 18,000 MW, up from 12,000-15,000 MW last year but still below peak demand that could reach to about 25,000 MW and was rising every year. Exports of gas to Iraq and exports of refined products to global markets remain an important source of revenues for Iran.

“We have balanced relations with everyone and people should respect it,” al Khateeb said when asked about rising US pressure over its Iranian energy supplies.

The minister said the power sector needed investment worth at least $30 billion to upgrade the grid, which was 50 years old and had lost 25% of its capacity due to Islamic State attacks.

Al Khateeb said Iraq was paying for Iranian gas based on a formula averaging around 11% of the price of benchmark Brent crude oil or about $6 per million British thermal unit (MBTU). This compares to $2-$3 per MBTU in the oversupplied US market.

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