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US grants Iraq waiver to buy Iranian energy supplies, but sets conditions

Shazand Thermal power plant in Shazand (Mohsan Dabiri-e Vaziri/WikiCommons)

This article was originally published by Radio Free Europe/Radio Liberty and is reprinted with permission.

The United States has granted a 45-day waiver to allow Iraq to continue to buy gas and electricity from Iran, despite sanctions imposed by Washington targeting Tehran’s energy sector.

The U.S. State Department on February 12 said the waiver, which sets tough conditions, “ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports.”

Washington imposed strict sanctions on the Iranian energy sector and countries doing business with Tehran in late 2018, but it granted Iraq a 45-day waiver before repeatedly extending it for 90 or 120 days at a time.

Baghdad relies on Iran for gas and electricity imports to supply about one-third of its power grid, crippled by years of conflict and poor maintenance.

Iraq, which receives financial and military support from Washington, has attempted to balance its relations with the United States and Iran, which carries significant influence with members of Iraq’s Shi’ite population.

The latest move comes as relations between Washington and Baghdad have frayed over the U.S. air strike that killed Iranian Major General Qasem Soleimani near Baghdad on January 3, prompting some calls for a withdrawal of U.S. troops from Iraq.

In its statement, the State Department said that “Iran has proven itself as a highly unreliable source of energy for Iraq. Reducing Iranian energy imports is therefore paramount for Iraq to achieve energy security.”

The waiver gives Iraq 45 days to show it is moving to develop domestic gas supplies or find alternative sources for power. The previous waiver had given Iraq 120 days to do so.

A senior Iraqi official told AP that Baghdad had been told the period could be extended once Iraq submits a technical timetable detailing how it plans to meet gas independence.

“It happened that the United States of America gave us a period of 45 days, and it could be extended in the event of us submitting a timetable regarding Iraqi gas investment,” said the official, who asked not to be identified.

“Until now, we have not sent them a timetable.”

In a move toward the goal, the Iraqi cabinet on January 23 approved six oil contracts awarded by the Oil Ministry in April 2018 that would boost domestic gas supply in the next few years.

Despite its reliance on Iranian energy supplies, Iraq has been hit by street protests by demonstrators angered by foreign influence in the country, including Iran’s.