|Iran's Energy Minister (left) and Iraq's Electricity Minister (right) meeting in Baghdad to sign energy agreement (Rudaw)
Iraq is continuing its balancing act between Iran and the United States over sanctions. On the one hand it is continuing with its trade deals with Tehran, while attempting to comply with parts of Washington’s demands.
Iraqi officials continue to say that they will not abide by the Trump administration’s sanctions. Prime Minister Abdul Mahdi has, and Foreign Minister Mohammed Ali al-Hakim in January 2019. At the end of 2018, Iran’s Energy Minister Reza Ardakanian was in Baghdad and with Iraq’s Electricity Minister Luay al-Khateeb for long term energy cooperation between the two. Iraq depends upon Iran for nearly . It imports electricity and natural gas to run power plants. Iraq can’t wean itself off of Iranian energy and gas immediately, so it needs to maintain these ties. There is also a large group of pro-Iranian parties in the parliament that resent the American actions, so the public statements by the government about not following Washington appease them as well.
Iraq’s continued ties with Iran does not mean Baghdad is neglecting the U.S. It just receivedon sanctions from the Trump administration for 90 days. It also signed a large deal with General Electric to build new power plants and improve the network, which will lessen the need for Tehran in the future. The Americans have pushed such deals to maintain its waiver, and to wean Iraq from Iran. Finally, the Central Bank of Iraq to not allow Iran access to dollar auctions it runs and not to use American currency in transactions with Tehran to deprive it of hard currency. These steps show that the Mahdi government is complying with Washington so that it can maintain its exemption.
Iran and the United States are two of Iraq’s most important allies. That is the reason why the Mahdi government has tried to play it down the middle between the two. It has assured Tehran that it will maintain ties throughout the sanctions, which will allow Iran to continue to make money while other sources are cut off. At the same time, it is promising Washington that it will help with its Iran policy, and attempt to reduce its dependence upon Iranian energy in the long run. This is a reasonable approach as Baghdad cannot afford to antagonize either one and serves its own interest to play both sides.
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