SULAIMANI (ESTA) — Iran’s oil minister has appointed a special envoy for Iraqi affairs, a first for the Islamic republic which is seeking $5 billion in arrears from its neighbor for gas exports, according to the ministry’s news agency.
Oil minister Javad Owji has tasked Abbas Beheshti with “endeavoring to speed up settling gas export claims”, the ministry’s Shana news agency said.
Iraq buys gas and electricity from neighboring Iran to supply about a third of its power sector, which has been worn down by years of conflict and poor maintenance, and is unable to meet the needs of the country’s 40 million population.
Despite sanctions imposed by Washington since 2018, Tehran exports gas to Baghdad under a series of temporary U.S. waivers meant to wean Iraq off Iranian energy.
Under agreements signed in 2013 and 2015, Iraq imports 70 million cubic meters (2.47 billon cubic feet) of Iranian gas per day.
The neighbors also signed a two-year electricity supply contract in June 2020.
But Iran has repeatedly cut off the gas and electricity supplies in order to pressure Iraq into paying outstanding bills.
According to Shana, Beheshti was tasked with “identifying the capacities and potentials of the two countries in the field of trade in oil and petroleum products”.
He was also asked to identify and create “the necessary bases to ramp up the mutual presence of private sectors and investors in the oil industry of the two countries”.
In October 2020, Hamid Hoseini, secretary of the Iranian Union of Petrochemical, Gas and Oil Exporters, said 60 percent of Iran’s petrol exports went to Iraq.
Oil-rich Iraq produces just 16,000 megawatts of power – far below the 24,000 megawatts needed, and even further from the expected future needs of a country whose population is set to double by 2050, according to the U.N.
The failure of Iraq’s power system is particularly acute in the baking hot summer months, often a time of social protest exacerbated by electricity shortages, when temperatures shoot past 45 degrees Celsius (113 Fahrenheit).