Renewal of the US Iraq Waiver: Impact and Implications

The United States extends an exemption from sanctions against Iraq for the purchase of Iranian electricity, raising complex geopolitical issues.

Share:

Renouvellement exemption américaine impacts géopolitiques

Gain full professional access to energynews.pro from 4.90$/month.
Designed for decision-makers, with no long-term commitment.

Over 30,000 articles published since 2021.
150 new market analyses every week to decode global energy trends.

Monthly Digital PRO PASS

Immediate Access
4.90$/month*

No commitment – cancel anytime, activation in 2 minutes.

*Special launch offer: 1st month at the indicated price, then 14.90 $/month, no long-term commitment.

Annual Digital PRO Pass

Full Annual Access
99$/year*

To access all of energynews.pro without any limits

*Introductory annual price for year one, automatically renewed at 149.00 $/year from the second year.

The recent US decision to extend a special exemption from economic sanctions for Iraq raises complex strategic and geopolitical issues. This exemption, renewed for 120 days, allows Iraq to import electricity from Iran, despite US sanctions against Tehran. This measure comes against a backdrop of heightened regional tensions, notably due to the conflicting relations between Israel and Hamas.

Financial Mechanisms and Iraq’s Energy Dependence

The financial mechanism of this transaction is unique. Iraq uses its own funds to pay Iran, with the funds placed in restricted Iranian accounts based in Iraq. These funds, according to the United States, can only be used for humanitarian purposes, in line with the sanctions imposed on Iran.

Economic implications and sanctions

The complexity of this situation is compounded by Iraq’s dependence on Iranian gas for its electricity supply. One third of Iraq’s energy needs are covered by gas imported from Iran. This dependence puts Baghdad in an awkward position, as it cannot pay Tehran directly due to US sanctions.

Political controversies and reactions

Iraq’s debt to Iran for previous gas imports is considerable, amounting to around $10 billion. This debt underlines the economic and energy interconnection between the two nations, despite the sanctions. The agreement also provides for a partial transfer of funds to Oman, indicating an attempt to diversify financial channels.

Iraq’s strategies in the face of Sanctions

The decision to renew this exemption is not without controversy. This is the 21st time the US has granted such an exemption since 2018. This practice has been regularly criticized by the Republican opposition, which sees it as a concession to Iran, allowing Tehran access to fresh funds. Criticism is exacerbated by accusations that Iran supports Hamas in its conflict with Israel and is involved in attacks on US troops in Iraq and Syria.
The United States responded to these attacks by carrying out strikes in Syria against sites linked to Iran. However, US officials claim that the renewal of the exemption is primarily aimed at supporting Iraq in its energy transition and reducing Iran’s influence over Iraq. They stress that this measure does not represent any change in policy towards Iran, and that sanctions against Tehran remain in force.

The US decision to renew Iraq’s exemption from sanctions reflects the complexities of international relations and the challenges of energy policy against a backdrop of regional tensions. While this exemption is seen as helping Iraq, it raises questions about the balance between sanctions against Iran and support for Iraq’s energy needs, as well as the potential impact of this decision on international relations and regional stability.

Ayatollah Ali Khamenei calls for modernising the oil industry and expanding export markets as Tehran faces the possible reactivation of 2015 nuclear deal sanctions.
The Ukrainian president demanded that Slovakia end its imports of Russian crude, offering an alternative supply solution amid ongoing war and growing diplomatic tensions over the Druzhba pipeline.
The United States cuts tariffs on Japanese imports to 15%, while Tokyo launches a massive investment plan targeting American energy, industry, and agriculture.
Brazil’s Cop 30 presidency aims to leverage the Dubai commitments to mobilise public and private actors despite ongoing deadlock in international negotiations.
During a meeting in Beijing, Vladimir Putin called on Slovakia to suspend its energy deliveries to Ukraine, citing Ukrainian strikes on Russian energy infrastructure as justification.
Vladimir Putin and Robert Fico met in China to address the war in Ukraine, regional security and energy relations between Russia and Slovakia.
Slovak Prime Minister Robert Fico plans to meet Vladimir Putin in Beijing before receiving Volodymyr Zelensky in Bratislava, marking a diplomatic shift in his relations with Moscow and Kyiv.
The three European powers activate the UN sanctions mechanism against Iran, increasing pressure on the country's oil exports as Tehran maintains high production despite Western measures.
Iran once again authorises the International Atomic Energy Agency to inspect its nuclear sites, following a suspension triggered by a dispute over responsibility for Israeli strikes.
First suspect linked to the Nord Stream pipeline explosions, a Ukrainian citizen challenged by Berlin opposes his judicial transfer from Italy.
Ukrainian drones targeted a nuclear power plant and a Russian oil terminal, increasing pressure on diplomatic talks as Moscow and Kyiv accuse each other of blocking any prospect of negotiation.
A Ukrainian national suspected of coordinating the Nord Stream pipeline sabotage has been apprehended in Italy, reigniting a judicial case with significant geopolitical implications across Europe.
Russia continues hydrocarbon deliveries to India and explores new outlets for liquefied natural gas, amid escalating trade tensions with the United States.
Azerbaijani energy infrastructure targeted in Ukraine raises concerns over the security of gas flows between Baku and Kyiv, just as a new supply agreement has been signed.
The suspension of 1,400 MW of electricity supplied by Iran to Iraq puts pressure on the Iraqi grid, while Tehran records a record 77 GW demand and must balance domestic consumption with regional obligations.
Beijing opposes the possible return of European trio sanctions against Iran, as the nuclear deal deadline approaches and diplomatic tensions rise around Tehran.
The United States plans to collaborate with Pakistan on critical minerals and hydrocarbons, exploring joint ventures and projects in strategic areas such as Balochistan.
Around 80 Russian technical standards for oil and gas have been internationally validated, notably by the United Arab Emirates, Algeria and Oman, according to the Institute of Oil and Gas Technological Initiatives.
Baghdad and Damascus intensify discussions to reactivate the 850 km pipeline closed since 2003, offering a Mediterranean alternative amid regional tensions and export blockages.
The two countries end 37 years of conflict with a 43-kilometer corridor under American control for 99 years. The infrastructure will transport 50 million tons of goods annually by 2030.

Log in to read this article

You'll also have access to a selection of our best content.