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Iran suspends electricity exports to Iraq

10 August 2021 14:32 (UTC +04:00)

Today, Tuesday, the Iranian Ministry of Electricity announced the suspension of the export of electricity to Iraq, APA reports citing Middleeast.

Although Iraq is an oil country, it relies heavily on Iran in the field of energy, as it imports a third of its consumer needs of gas and electricity, due to its dilapidated infrastructure, which makes it unable to achieve self-sufficiency to secure the needs of its population of 40 million people.

Tehran is demanding Baghdad to pay more than $6 billion in arrears, which are bills owed by the Iraqi Ministry of Electricity, which US sanctions prevent from paying any amount in dollars to Iran.

But Western and Iraqi sources told AFP earlier this year that Iraqi officials had been given a green light by the United States to release the $2 billion owed to Iran for gas imports through a Swiss bank account.

Last March, the United States granted Iraq a 120-day exemption to pay for electricity imports from Iran.

This is the first exemption granted under the administration of Joe Biden and for the longest period permitted by law, and it came days before a “strategic dialogue” between Iraq and the United States.

The previous US administration headed by Donald Trump withdrew from the nuclear agreement with Iran and re-imposed sanctions at the end of 2018, which prevents many countries and international companies from dealing with the government or Iranian companies for fear of sanctions.

But the US administration continued to grant exemptions to Iraq until it finds other suppliers, the last of which was last January for a period of 3 months.

Under the latest exemption granted by the Joe Biden administration, Iraq was able to continue importing electricity and gas from its eastern neighbor for four months, that is, from the beginning of April until the beginning of August.

This exemption is the longest term among the previous exemptions, and it is the maximum allowed by US law.