Author: PPD Team Date: 11/03/2025
The United States has ended a sanctions waiver that allowed Iraq to buy electricity from Iran, following President Donald Trump’s renewed “maximum pressure” policy on Tehran.
The waiver, which expired on 8 March 2025, was initially introduced in 2018 after the US reimposed sanctions on Iran following its withdrawal from the nuclear deal.
The US Department of State stated that the decision aims to prevent any financial relief for Iran. A US Embassy spokesperson in Baghdad urged Iraq to reduce its dependence on Iranian energy sources and pursue energy independence.
Despite its oil and gas reserves, Iraq faces chronic electricity shortages due to war, corruption, and mismanagement. It relies on Iranian gas and electricity imports to meet demand, especially during summer, when temperatures exceed 50°C. The expired waiver applied to direct electricity imports, but it remains uncertain whether Iraq can continue importing gas from Iran for power generation.
While the US Embassy stated that Iranian electricity imports accounted for only 4% of Iraq’s consumption, Ahmad Moussa, spokesperson for Iraq’s Ministry of Electricity, warned that losing gas imports could cut Iraq’s electricity supply by 30%. Iranian gas supplies to Baghdad and the central Euphrates region had already stopped for two months, and southern power plants faced unstable supply. A senior official estimated that Iraq could lose 8GW of energy from Iranian gas-dependent power plants, in addition to 500MW of directly imported electricity.
The Iraqi government has been working to diversify its energy mix, investing in renewables and infrastructure improvements. QatarEnergy and TotalEnergies have partnered on a 1.25GW solar project in Basra, pending regulatory approvals. However, immediate alternatives remain limited, raising concerns about worsening power outages and public frustration.
The waiver’s expiration is part of the US “maximum pressure” campaign against Iran, aimed at curbing its nuclear program, missile development, and regional influence. In 2018, former President Donald Trump withdrew the US from the 2015 Iran nuclear deal and reimposed sanctions targeting Iran’s oil exports and financial transactions to weaken its economy. Iraq had received temporary waivers to continue importing Iranian electricity and gas, but the latest waiver was not renewed under Trump’s second-term policy.
Iraq is caught between the US and Iran. The US wants Iraq to reduce its reliance on Iranian energy and align with its policies, while Iran sees Iraq as a key economic and political ally. Cutting energy supplies could increase instability in Iraq, which has already faced protests over electricity shortages. With few immediate alternatives, the country may struggle to maintain power supply as it searches for new energy sources.