A source in the Iraqi foreign ministry has confirmed the Arab country will pay $2.76 billion worth its energy debts to Iran as part of a recent understanding with US authorities.
A Saturday report by Reuters news agency quoted an unnamed official in the Iraqi foreign ministry as saying that Baghdad had received a sanctions waiver from the United States to be able to make payments to settle part of heavy arrears it owes to Tehran for imports of natural gas and electricity.
The “senior official” said US Secretary of State Antony Blinken had given the clearance for the payment to Iraqi Foreign Minister Fuad Hussein on the sidelines of a conference in Saudi Arabia on Thursday.
Iraqi Foreign Ministry spokesperson Ahmed Al-Sahhaf also confirmed in a short statement that Hussein had made progress “regarding financial dues between Iraq and Iran during his discussion with his American counterpart in Riyadh”.
Iraq relies on imports from Iran for a major part of its gas and electricity demand. However, US sanctions on Iran have made it difficult for Iraq to pay for imports leading Iran to regularly cut gas flows.
A senior Iranian businessman who watches over trade between Iran and Iraq said earlier on Saturday that some $2.7 billion worth of Iran’s frozen funds in Iraq had been released.
Yahya Al-e Eshaq, who chairs Iran-Iraq joint chamber of commerce, said the funds will be used for imports of basic goods into Iran as well as for payments related to Iranian pilgrims traveling to Saudi Arabia to attend this year's hajj ceremony.