US to exempt Iraq from sanctions against Iran, Iraqi officials say

The United States has announced to Iraq its readiness to renew sanctions waivers allowing the country to continue importing gas and electricity from Iran, Iraqi officials say.

The Associated Press cited what it called three senior members of Iraq’s government as saying that the US State Department has conveyed its willingness to extend the waiver.

Baghdad, however, must be able to formulate a timeline by the end of the week, detailing a plan to wean itself off the Iranian gas, the report said.

The demand has long been in the US government’s itinerary in a bid to pry Baghdad away from Tehran’s perceived orbit, but Iraqi officials have time and again asserted that the call is unviable, at least for the foreseeable future.

The last such waiver was granted in October and is set to expire on February 13.

US President Donald Trump reimposed unilateral sanctions on Iran’s energy and finance sectors in November 2018 following his decision to withdraw from a landmark 2015 nuclear deal signed between Tehran and six major world powers.

“The American side has announced to us their readiness” to extend the exemptions, said one of the three officials, who reportedly spoke on condition of anonymity.

The Iraqi officials said the new waiver would be a test of Baghdad-Washington relations after the US assassinated top Iranian general Qassem Soleimani and Iraq’s anti-terror commander Abu Mahdi al-Muhandis in a drone strike last month.

Following the attack, Iraqi lawmakers unanimously approved a bill, demanding the withdrawal of all foreign military forces led by the United States from the country. In response, the Trump administration threatened to shut off Iraq’s access to its oil money in a bank account in New York.

Gas imports from Iran generate as much as 45 percent of Iraq’s 14,000 megawatts of electricity consumed daily. Iran transmits another 1,000 megawatts directly, making itself an indispensable energy source for its Arab neighbor.

Iraq and Iran share a 1,400-kilometer-long border. For their run-of-the-mill maintenance, Iraqis depend on Iranian companies for many things from food to machinery, electricity, natural gas, fruits, and vegetables.

The administration of Trump is pressing Iraq to stop buying natural gas and electricity from Iran or at least show signs that it is reducing the imports. The US has also urged Iraq to establish contracts with US companies.

The Iraqi cabinet reportedly moved toward placating US conditions to extend the sanctions waiver in late January by approving six oil contracts awarded by the Oil Ministry in April 2018 that would increase domestic gas supply in over two years.

“We expect to sign soon,” said an industry official from one of the three firms awarded the contracts. The official asked not to be named in order not to compromise ongoing talks with the government, the report said.