U.S. President Trump has ended Iraq’s waiver for Iranian gas imports, raising concerns about worsening power shortages. Experts warn this may destabilize Iraq’s political situation, with impacts on energy supply and potential civil unrest. The article explores implications for Iraq’s energy policies amid heightened U.S. sanctions on Iran. Immediate solutions are critical as summer approaches, with analysts suggesting alternative strategies to mitigate the crisis.
On Wednesday, U.S. President Donald Trump issued an executive order terminating Iraq’s waiver to import gas from Iran, which is essential for electricity generation. This decision has raised concerns among experts and lawmakers, suggesting it may exacerbate Iraq’s ongoing power shortages and destabilize the country’s already tenuous political, economic, and security environment. The executive order, termed The National Security Presidential Memorandum (NSPM-2), aims to impose significant pressure on Iran while impacting Iraq’s energy infrastructure.
The memorandum mandates tighter sanctions on Iran by eliminating financial waivers, obstructing Iranian oil exports, isolating Tehran diplomatically, and preventing Iran from using Iraq’s financial systems. This also includes expected sanctions on pro-Iran militias operating within Iraq. Experts, including independent energy scholar Harry Istepanian, forecast challenges for Iraq in the electricity sector, particularly with Iran struggling to meet gas supply commitments.
Istepanian proposed possible mitigation measures, such as integrating with the Russian Mir payment system and promoting the rapid development of domestic gas initiatives. Furthermore, he indicated that without a prompt resolution to replace Iranian gas, Iraq risks renewed civil unrest, especially in the southern regions. He cautioned the U.S. government that isolating Iran could lead to instability beyond Iraq, potentially enhancing extremist activities within the region.
Iraq’s electricity ministry spokesperson Ahmed Musa announced intentions to increase power generation capacities significantly. The ministry aims to add 35,000 megawatts through steam and gas plants to meet demand, while also pursuing foreign investments and state funding in collaboration with major companies such as General Electric (GE) and Siemens. This initiative ties into broader efforts to stabilize Iraq’s electricity supply over the next four to five years.
The repercussions of Trump’s order extend to the Kurdistan Region, where Kurdish authorities must cease illicit oil shipments to Iran or face U.S. sanctions. The Kurdistan Regional Government (KRG) has directed its natural resources ministry to work alongside international firms to revitalize Kurdish oil exports without delay. This follows a federal law amendment that presents better compensation rates for international oil companies in the region.
According to Jamal Kocher, an Iraqi Finance Committee member, the U.S. measures could yield both adverse and favorable outcomes for Iraq. He emphasized the crucial nature of finding alternatives for Iranian gas and navigating the implications of these U.S. policies, which may encourage cooperation with the Trump administration but simultaneously perpetuate Iraq’s liquidity crisis due to ongoing foreign interferences.
Since early this year, Iraq has halted its daily dollar auctions to improve liquidity and has instead opted for dealing directly with foreign countries. Critics have highlighted that previous auctions exacerbated the liquidity problem by channeling resources to Iran and neighboring states under questionable premises. As summer approaches, the surging demand for electricity poses a significant risk of public unrest, indicating an urgent need for effective energy solutions.
The article discusses the implications of U.S. President Donald Trump’s recent executive order ending Iraq’s exemption for importing Iranian gas, a critical resource for the country’s electricity generation. The order is intended to increase pressure on Iran amid geopolitical tensions but poses risks to Iraq’s energy supply and political stability. Energy experts and officials highlight the potential fallout from this decision, including rising electricity demand and potential civil unrest in Iraq as it seeks alternatives to Iranian gas supplies.
In conclusion, the ending of Iraq’s exemption to import Iranian gas may exacerbate existing power shortages and present serious threats to the country’s stability. It places further strain on Iraq’s already fragile energy sector, potentially inciting civil unrest if solutions are not promptly implemented. The situation underlines the complexity of geopolitical dynamics in the region and the implications of U.S. sanctions on Iran for Iraq’s future energy policy and political landscape.
Original Source: www.newarab.com
