Iraq unsuccessful in securing American approval for the import of Turkmen gas through Iran
Iraq, a country that has been relying on gas and power imports from Iran for the past decade, finds itself in a precarious situation. Iranian gas, accounting for nearly a third of Iraq's power generation, has been a critical lifeline. However, the lack of gas supplies from Iran, following the end of sanctions waivers in 2023, has left a power generation gap of about 3,000 megawatts.
This shortage has had a significant impact on ordinary Iraqis. Hussain Saad, a butcher shop owner in Baghdad, is one such individual struggling to keep his meat from spoiling due to power shortages. Many Iraqis, like him, are forced to rely on expensive private generators to make up for the power deficit.
In an effort to plug this gap, Iraq is exploring alternatives. One such option is building infrastructure to import liquefied natural gas (LNG) from Qatar. However, Iraq's quest for diversification has faced hurdles. A deal proposed in 2023 to import gas from Turkmenistan through Iran was blocked under U.S. pressure. This deal would have seen Iran receive gas and supply it to Iraq, but it risked violating U.S. sanctions on Iran.
The person who attempted to secure the United States' approval for importing 5.025 billion cubic metres of gas from Turkmenistan via Iran was a representative from Baghdad. The deal would have included a third-party international monitor to oversee compliance with U.S. sanctions and anti-money laundering rules. However, U.S. objections ultimately scuppered the deal, leaving Iraq facing an increasingly difficult balancing act between its main allies in Washington and Tehran.
The loss of this potential gas supply could jeopardise Baghdad's ability to sustain gas plants during peak summer demand. Iraq has been struggling to provide power to its citizens since the 2003 U.S.-led invasion, and this loss represents more than 10% of Iraq's roughly 28,000 megawatts of total capacity, enough to impact around 2.5 million homes according to Iraqi electricity officials.
Despite these challenges, Iraq continues to pursue energy deals with global oil majors. In 2024, gas imports from Iran reached 9.5 billion cubic metres. Iraq has signed deals with TotalEnergies, BP, and Chevron over the past two years to speed up its gas projects. Notably, French oil major TotalEnergies has launched the second development phase at Iraq's Ratawi field, a $27 billion project aimed at boosting Iraq's oil, gas, and power production. Britain's BP has also received final government approval for the redevelopment of Iraq's giant Kirkuk oilfields, with an initial plan to produce 3 billion barrels of oil equivalent.
As Iraq navigates these complex geopolitical and energy challenges, it continues to strive for energy independence and a reliable power supply for its citizens.
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