Washington renews sanctions waiver allowing Iraq pay Iran for electricity
A gas facility in Iran. Photo: Tehran Times
Baghdad (IraqiNews.com) – US officials said on Tuesday that Iraq may now pay Iran for power under a fresh 120-day waiver that the US authorized.
The officials emphasized that Tehran could only use the money for humanitarian needs and tried to allay criticism of the US decision to provide Iran with the money, according to Reuters.
The waiver was the same as the first one that was granted in July, which permitted payments to be made by Iraq into restricted Iranian accounts within the country as well as to accounts in foreign countries with similar restrictions.
The funds may only be utilized for non-sanctionable transactions, such as purchasing food and agricultural items for humanitarian purposes.
The United States has placed sanctions on Iran due to Tehran’s nuclear program and backing for extremist groups.
Iraq is the first destination for Iranian exports, as the value of Iranian exports to Iraq between March 2022 and March 2023 reached $10.23 billion.
Iran currently aims to raise the volume of trade with Iraq to $20 billion.
Earlier in August, the spokesperson for the US Department of State, Matthew Miller, revealed that Washington is working closely with Iraq to ensure Iran’s energy payments are managed in a manner consistent with US sanctions and cannot be diverted for illicit means.
Gas imports from Iran are extremely important for Iraq to generate electricity. However, US sanctions imposed on Iran make it difficult for Baghdad to pay for the Iranian gas.
Tehran is putting Baghdad under pressure to get US permission to disburse funds by stopping Iranian natural gas exports to Iraq, reducing Iraq’s ability to generate electricity, and forcing the country to cut off electricity during the hot summer, according to Reuters.
The US sanctions imposed on Iran force Iraq to pay for Iranian electricity only through restricted bank accounts in Iraq, which Iran can use to purchase its humanitarian needs after obtaining permission from the United States.
Iraq heavily relies on gas imports from Iran but has recently invested in many projects to start taking advantage of flared gas and using renewable energy to generate electricity.