SULAIMANI (ESTA) — The United States has granted Iraq a three-month extension to a sanctions waiver allowing it to import Iranian gas, according to an Iraqi official.
The waiver will continue to exempt Iraq from U.S. sanctions reimposed on Iran, hobbling its oil-dependent economy, after U.S. President Donald Trump withdrew Washington from world powers’ 2015 nuclear deal with the Islamic Republic.
The new exemption, which is longer than previous extensions, was granted after “long discussions”, the official told AFP on Monday (January 4).
Washington has repeatedly extended the waiver for Baghdad to use crucial Iranian energy supplies for its struggling power grid, usually for periods of 90 or 120 days.
The United States has insisted that oil-rich Iraq, OPEC’s second-largest producer, move towards self-sufficiency as a condition for its exemption for importing Iranian energy. Iraq relies heavily on Iranian gas to feed several power stations.
Iraq buys gas and electricity from Iran to supply about a third of its power sector, worn down by years of conflict and poor maintenance and unable to meet the needs of the country’s 40 million population.
Iran has demanded nearly $6 billion in unpaid gas bills from Baghdad, recently reducing its supply to Iraq over arrears.
While American exemptions allow Iraq to obtain supplies from its neighbor without risk of reprisals, they still prevent it from paying its Iranian bills in dollars.