US ends sanctions waiver for Iraq to buy electricity from Iran

The United States has terminated a sanctions waiver that allowed Iraq to purchase electricity from neighboring Iran, a move consistent with U.S. President Donald Trump's policy of "maximum pressure" on Tehran. The U.S. State Department issued a statement on Sunday stating that the decision not to renew the waiver was to "ensure that we are not allowing Iran to receive any degree of economic or financial assistance." This action reinforces the US stance against Iran's economic activities.

The waiver began in 2018, when the Trump administration reimposed sanctions on Tehran after withdrawing from the nuclear deal reached with Iran during the Obama administration. At the time, Trump imposed broad U.S. sanctions on any country that purchased Iranian oil. The waiver for Iraq was granted as a "key partner" of the United States. This highlights the strategic importance of Iraq to the US and the complexities of their relationship.

Since returning to the White House this January, Trump has renewed his policy of "maximum pressure" on Iran. A U.S. Embassy in Baghdad spokesperson said earlier on Sunday that "the President's maximum pressure campaign is aimed at ending Iran's nuclear threat, curbing its ballistic missile program, and stopping its support for terrorist groups." The spokesperson urged Baghdad to "eliminate its dependence on Iranian energy as quickly as possible." This reflects the US's broader concerns about Iran's regional influence and activities.

Despite possessing abundant oil and gas resources, Iraq has faced electricity shortages for decades due to war, corruption, and mismanagement, and relies heavily on imports of Iranian gas, as well as direct electricity imports from Iran, to meet its power needs. Three Iraqi energy officials interviewed by Reuters said that the country has no immediate alternative to energy imports from Iran, which will lead to significant problems in providing sufficient electricity to meet domestic consumption. Many Iraqis have had to rely on diesel generators or endure temperatures exceeding 50 degrees Celsius (122 degrees Fahrenheit) in the summer. The dependence on Iran creates vulnerabilities for Iraq's energy security.

The expired waiver applied to direct electricity imports. It is currently unclear whether Iraq will be able to continue importing Iranian gas for its power plants. The U.S. Embassy claimed that electricity imports from Iran account for only 4% of Iraq's electricity consumption. However, Iraqi Ministry of Electricity spokesman Ahmed Moussa said that if gas imports are also banned, it "will cause Iraq to lose more than 30% of its electricity energy," so the government is looking for alternatives. Moussa stated that Iranian gas has already stopped supplying power plants in Baghdad and the central Euphrates region for the past two months, while supplies to power plants in the south have been unstable. A senior official at the Ministry of Electricity told the Associated Press that the ministry has not yet formally received notification from the United States regarding the decision on gas imports. The potential disruption to gas imports could severely impact Iraq's power generation capacity.

The U.S. government's decision to revoke the waiver came two days after Trump said he had sent a letter to Iranian leaders seeking to initiate nuclear deal negotiations. The U.S. president warned that military action could be taken if Iran does not yield. Iranian Supreme Leader Ayatollah Ali Khamenei retorted that the country would not negotiate with a "bully" who only wanted to impose conditions instead of starting negotiations. Nevertheless, the Iranian mission to the United Nations said on Sunday that Tehran may be willing to discuss certain issues, but would not completely terminate its nuclear program. The mission said in a statement: "If the aim of negotiations is to address concerns about the potential militarization of Iran's nuclear program, such discussions could be considered." "However, if the aim is to dismantle Iran's peaceful nuclear program and claim that what Obama failed to achieve has now been achieved, such negotiations will never take place." The contrasting statements highlight the complex dynamics and preconditions for any potential dialogue.

The landmark 2015 nuclear deal that Obama helped Tehran reach with major powers promised to lift sanctions in return for Iran limiting its nuclear program. Tehran denied seeking nuclear weapons and initially complied with the agreement after Trump withdrew from it, but later rolled back its commitments. U.S. officials estimate that if Iran chooses to do so, it would now only take a few weeks to produce a nuclear bomb. This underscores the urgency and potential consequences of the ongoing tensions surrounding Iran's nuclear ambitions.