Iraq
Director of the Iraqi prime minister’s office Ihsan Yassin al-Awadi (right), and Iran's ambassador to Iraq Mohammad Kazem Al-e Sadeq (left) sign an agreement to exchange Iraqi oil for Iranian gas on July 11, 2023. Photo: PM Sudani's office
ERBIL, Kurdistan Region - Iraq and Iran signed an agreement on Tuesday which will see Baghdad paying for imported gas from Tehran using its crude oil, days after Iran limited its supply of the natural resource to the neighboring country due to US restrictions preventing Iraq from paying back its power-related arrears.
Iraq’s electricity ministry last week announced that the country had lost nearly 5000 megawatts of power due to Iran completely stopping the supply of gas to the southern region of Iraq, as well as cutting down the exports to Baghdad and central Iraq from 45 million cubic meters to 20 million cubic meters.
The agreement was signed between Ihsan Yassin al-Awadi, director of the Iraqi prime minister’s office, and Mohammad Kazem Al-e Sadeq, Iran's ambassador to Baghdad, after days of negotiation, according to a statement from the office of Iraqi Prime Minister Mohammed Shia’ al-Sudani.
“In light of the agreement, the import of Iranian gas has been resumed, and 10 million cubic meters have been released, and it is hoped that that will increase this evening, until the quantity agreed upon in the deal is achieved, which will enable the electricity ministry to operate all electrical stations,” Sudani said in a televised speech on Tuesday.
The deal will save Iraq money, enable it to continue providing power while also paying for Iranian gas imports, and create stability until Baghdad completes its gas projects and achieves self-sufficiency, the Iraqi premier added.
Sudani stressed that his cabinet has made efforts from day one to identify the main factors for the power crisis and devising “immediate, medium, and long-term” solutions, citing agreements with international gas companies which have enabled Iraq to produce about 26 thousand megawatts of power.
Iraq’s electrical grid has for years been dependent on gas imports from Iran to run its power generation plants, with Baghdad remaining overly reliant on Tehran despite plans by PM Sudani to develop the country’s gas sector and achieve self-sufficiency within the next five years.
In a meeting with US Secretary of State Antony Blinken in Riyadh in June, Iraqi Foreign Minister Fuad Hussein raised the matter of difficulties in paying funds owed to Iran for purchases of gas and electricity given strict US with sanctions on financial transactions with Iran. Tehran announced that $2.7 billion of frozen Iranian assets were released from Iraq two days after the meeting.
Iran has confirmed that Iraq has paid off all its gas arrears to the Islamic republic, but stressed that sometimes there are problems in transferring the money from the Trade Bank of Iraq (TBI) to Tehran.
Iraq and French energy giant TotalEnergies on Monday put pen to paper on a $27 billion contract to develop Iraq’s oil, gas, and renewable energies sectors, in a major step towards achieving gas self-sufficiency.
Iraq’s electricity ministry last week announced that the country had lost nearly 5000 megawatts of power due to Iran completely stopping the supply of gas to the southern region of Iraq, as well as cutting down the exports to Baghdad and central Iraq from 45 million cubic meters to 20 million cubic meters.
The agreement was signed between Ihsan Yassin al-Awadi, director of the Iraqi prime minister’s office, and Mohammad Kazem Al-e Sadeq, Iran's ambassador to Baghdad, after days of negotiation, according to a statement from the office of Iraqi Prime Minister Mohammed Shia’ al-Sudani.
“In light of the agreement, the import of Iranian gas has been resumed, and 10 million cubic meters have been released, and it is hoped that that will increase this evening, until the quantity agreed upon in the deal is achieved, which will enable the electricity ministry to operate all electrical stations,” Sudani said in a televised speech on Tuesday.
The deal will save Iraq money, enable it to continue providing power while also paying for Iranian gas imports, and create stability until Baghdad completes its gas projects and achieves self-sufficiency, the Iraqi premier added.
Sudani stressed that his cabinet has made efforts from day one to identify the main factors for the power crisis and devising “immediate, medium, and long-term” solutions, citing agreements with international gas companies which have enabled Iraq to produce about 26 thousand megawatts of power.
Iraq’s electrical grid has for years been dependent on gas imports from Iran to run its power generation plants, with Baghdad remaining overly reliant on Tehran despite plans by PM Sudani to develop the country’s gas sector and achieve self-sufficiency within the next five years.
In a meeting with US Secretary of State Antony Blinken in Riyadh in June, Iraqi Foreign Minister Fuad Hussein raised the matter of difficulties in paying funds owed to Iran for purchases of gas and electricity given strict US with sanctions on financial transactions with Iran. Tehran announced that $2.7 billion of frozen Iranian assets were released from Iraq two days after the meeting.
Iran has confirmed that Iraq has paid off all its gas arrears to the Islamic republic, but stressed that sometimes there are problems in transferring the money from the Trade Bank of Iraq (TBI) to Tehran.
Iraq and French energy giant TotalEnergies on Monday put pen to paper on a $27 billion contract to develop Iraq’s oil, gas, and renewable energies sectors, in a major step towards achieving gas self-sufficiency.
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