US Ends Waiver For Iraq To Buy Natural Gas and Electricity From Iran

The Trump administration is beginning to enforce its Maximum Pressure campaign against Iran and Iraq is paying the price. In March the U.S. refused to renew Iraq’s waiver from sanctions to buy natural gas and electricity from Tehran. This is throwing the government into panic as it has no alternative and the hot summer months are fast approaching.

 

In early February the Trump White House announced it would not allow Baghdad to buy energy from Iran any longer. This started with the February 4 signing of National Security Presidential Memorandum-2 that began a new Maximum Pressure campaign against Tehran. At the start of March the waiver officially ended.

 

This is a big hit for Iraq which relies upon Iran for up to 40% of its electricity production.

 

At the same time Tehran has never been a reliable partner. In November 2024 for instance, Iran said that it was shutting down gas exports to central Iraq due to maintenance work. Iraq lost 8000 megawatts as a result. This was supposed to only last 15 days but continues to this day. The National reported that the real reason for this shutoff was that Iran needed the gas for its own domestic needs during winter. This has happened again and again over the years leading to blackouts in central and southern Iraq.

 

Baghdad has signed various energy deals with neighboring countries in recent years but none are able to make up for the loss of Iranian exports. There is one project to connect Iraq’s electricity grid with the Gulf Cooperation Council. That’s supposed to be completed by the end of 2025 and provide 500-600 megawatts. There’s another project to build a natural gas pipeline between the two sides that should be finished by this summer. Iraq also wants to double its electricity imports from Turkey to 600 megawatts.

 

The problem is none of these will be able to come close to what Baghdad is losing from Iran. Things will only get worse in the coming months when summer arrives and electricity needs spike. The country has a history of protests over the lack of services and this could spark another wave of demonstrations. That would hurt Prime Minister Mohammed Sudani who has promoted himself as the service leader and will be a major part of his campaign in the upcoming elections that are supposed to happen later this year.

 

SOURCES

 

Asharq Al-Awsat, “Washington Signals Gradual, Sweeping Sanctions on Iraq,” 3/9/25

 

Bas News, “Iraq Seeks Gulf Gas Imports After US Ends Iran Sanctions Waiver,” 3/9/25

- “Iraq to Double Electricity Imports from Turkey Under New Agreement,” 2/18/25

 

Benny, John Aldroubi, Mina, “US rescinds sanctions waiver for Iraq’s energy imports from Iran,” The National, 3/9/25

 

NINA, “Trump cancels exemption granted to Iraq to import electricity and gas from Iran,” 2/5/25

 

Rudaw, “Iran cuts Diyala province electricity: Local official,” 3/2/25

 

Salem, Amr, “Iraq’s electricity production declines,” Iraqi News, 2/9/25

 

Shafaq News, “8,000 MW threat: Iraq faces looming summer blackouts,” 3/9/25

- “Iraq to complete Gulf power grid in 2025,” 1/29/25