Washington working with Iraq to settle Iranian gas dues
The spokesperson for the US Department of State, Matthew Miller. Photo: AP/Yonhap
Baghdad (IraqiNews.com) – 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.
In a press briefing on Wednesday, Miller said that the electricity waiver provided to Iraq last month allows for the transfer of funds from Iran’s restricted accounts in Iraq to restricted accounts in select third-country banks.
“Prime Minister Al-Sudani has demonstrated a commitment to strengthening Iraq’s energy security, and this mechanism is only one way we are seeking to alleviate Iranian pressure on Iraq,” Miller stated.
“We remain supportive of transactions for humanitarian goods and will continue to engage with the Iraqi government on these complex issues,” Miller added.
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.
The Iraqi Prime Minister, Mohammed Shia Al-Sudani, announced last month that Iraq had reached an agreement with Iran regarding gas imports, which Iraq needs to operate power plants.
The Iraqi Prime Minister elaborated that Iraq agreed to provide Iran with crude oil in exchange for gas, explaining that the decision will ensure the continuation of gas supplies from Iran and will end the crisis.
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.
About a month ago, the Iranian Minister of Economy, Ehsan Khandouzi, revealed that Iraq has pledged to facilitate Iran’s access to its frozen assets in Iraq, according to the Islamic Republic News Agency (IRNA).
The Head of the Iran-Iraq Joint Chamber of Commerce, Yahya Al-Eshaq, mentioned earlier that Iraq has paid all dues of $10 billion to Iran, Al-Arabiya News reported.
Al-Eshaq elaborated that Iraq has paid its overdue debts to Iran through the Trade Bank of Iraq (TBI), and the two countries have agreed that the money will be used for the purchase of goods that are not included in the embargo imposed on Iran, such as medicine, IRNA reported.
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.