The Trump administration has decided to revoke a waiver that previously allowed Iraq to make payments to Iran for electricity, as part of President Donald Trump’s “maximum pressure” strategy against Tehran, a State Department spokesperson confirmed on Saturday.
The waiver, which was granted to help Iraq meet its energy demands amid US sanctions on Iran, expired recently.
The spokesperson highlighted that the move would prevent Iran from gaining any economic relief, aligning with Trump’s overarching goals to curb Iran’s nuclear development, restrict its missile programme, and halt its support for militant groups.
Since taking office in January, President Trump has escalated his pressure on Iran by reinstating harsh sanctions aimed at isolating the country economically and reducing its oil export revenues, which are seen as crucial for Tehran’s nuclear aspirations.
Iran, however, denies seeking nuclear weapons, maintaining that its nuclear activities are for peaceful purposes.
The decision to end the waiver presents challenges for Iraq, which has depended on Iranian electricity imports for its energy supply.
Farhad Alaaeldin, an adviser to Iraqi Prime Minister Mohammed Shia al-Sudani, acknowledged that this change would cause “temporary operational challenges.” However, he reassured that the Iraqi government is already working on alternative solutions to maintain electricity availability and mitigate potential disruptions.
“Iraq’s government is focused on strengthening energy security, enhancing domestic production, improving grid efficiency, and investing in new technologies to reduce reliance on external energy sources,” said Alaaeldin.
Although Iraq had been granted the waiver, the US has repeatedly urged Baghdad to reduce its dependence on Iran for energy. The State Department reiterated this message, calling Iran an “unreliable energy supplier” and emphasising the need for Iraq to sever ties with Iranian energy sources as soon as possible.
“President Trump has been clear in his position,” said National Security spokesperson James Hewitt. “Iran must abandon its nuclear ambitions and destabilising activities or continue to face the consequences of maximum pressure.”
In addition, the US used the waiver review process to pressure Iraq into resolving its ongoing issues with the Kurdish region. The goal is to increase global oil supply and manage oil prices, while continuing efforts to curb Iran’s oil exports. Sources indicate that Iraq’s discussions with the Kurdish region regarding oil exports have faced difficulties.
Iranian electricity imports accounted for just 4% of Iraq’s total electricity consumption in 2023, according to the US. State Department, which downplayed the significance of Iranian energy imports. The department emphasised the potential for US companies to assist Iraq in improving its energy infrastructure.
“Iraq’s energy transition offers opportunities for US firms, who are leaders in increasing the efficiency of power plants, improving electricity grids, and developing interconnections with reliable energy partners,” the spokesperson stated.
As the situation develops, Iraq faces increasing pressure to secure alternative energy sources while navigating the broader geopolitical consequences of the USdecision to intensify sanctions on Iran.
