Baghdad, Iraq- Iraq is grappling with a potential energy crisis after the recent revocation of its exemption from US sanctions on Iranian gas and electricity imports. This decision by President Donald Trump threatens to cut off nearly 40% of Iraq’s power supply, leaving the country scrambling to secure alternative energy sources and avoid widespread blackouts.
For decades, Iraq has relied on Iranian imports to meet its energy needs, with up to 40% of its electricity and gas coming from Iran. However, as US sanctions have made payments increasingly difficult, the recent executive order further complicates the situation. The sanctions target Iran’s economic activities, including energy exports, and outline measures to stop Iraq from using its financial system for sanctions evasion, including preventing Gulf countries from facilitating Iranian energy exports.
In response to this threat, members of Iraq’s Oil and Gas Committee are set to meet with ministers of electricity and oil to discuss potential solutions, including securing exemptions or finding alternative energy suppliers. Iraq has explored deals with countries like Jordan, Turkmenistan, and Qatar, but has faced obstacles, including a lack of financial support and logistical challenges. Furthermore, the reliance on Iranian pipelines has compounded the difficulties, particularly as US sanctions thwarted a deal with Turkmenistan, due to Iranian involvement in the intermediary company.
The potential impact of cutting off Iranian gas is severe. Experts predict that it would create a major power shortfall, affecting millions of Iraqis, especially during the summer months when temperatures often exceed 50°C. Iranian economic expert Saeed Shavardi believes that while Iran might seek new customers for its gas, the real challenge will lie in Iraq’s response to mounting US pressure.
Short-term solutions being considered include promoting solar energy systems, deploying floating power stations, converting power plants to alternative fuels like diesel, and even implementing scheduled power outages. Long-term solutions point to infrastructure investments, such as LNG import facilities and large-scale solar projects. However, these measures will take time, leaving Iraq reliant on external energy sources for the near future.
As Iraq navigates this energy crisis, it must balance its immediate power needs with its long-term energy strategies, while also addressing the complex diplomatic and economic pressures stemming from US sanctions.
