The United States has decided not to renew a waiver that allowed Iraq to purchase electricity and gas from Iran, marking a significant shift in the ongoing economic and energy relations between the two countries. The waiver expired on March 8, 2025, without renewal, according to a statement from a U.S. Embassy spokesperson in Baghdad.
This decision is part of the broader “maximum pressure” campaign initiated by former President Donald Trump against Iran. The U.S. spokesperson emphasized that the move ensures Iran will not receive any economic or financial relief, especially as it relates to energy supplies. The 120-day sanctions waiver, which permitted Iraq to import Iranian gas for its power plants, came to an end on Saturday.
Iraq’s Electricity Ministry was caught off guard by the move, stating that it had not received any official notice from the U.S. about ending the waiver. Ministry spokesperson Ahmed Moussa clarified that there were no formal communications indicating that the U.S. would stop allowing the exemptions, which have been critical for Iraq’s energy supply. The Iraqi government is now focusing on addressing any potential energy crisis that could arise if Iranian gas imports are fully cut off.
In response, the Iraqi government is working on diversifying its gas sources. It recently signed a contract with Turkmenistan and is also focused on reducing gas flaring in domestic oil fields to generate more fuel for power stations. These measures are part of a long-term plan to reduce Iraq’s dependency on Iranian gas.
The suspension of Iranian gas imports is expected to have severe repercussions. Atwan al-Atwani, head of the Parliamentary Finance Committee, warned that stopping these imports could collapse Iraq’s electricity system, which heavily relies on Iranian energy. Al-Atwani pointed out that the sanctions are essentially targeting Iraq, which suffers the consequences of being caught between U.S. and Iranian policies.
Iraq has historically depended on Iranian gas for up to 40% of its energy needs, especially during the scorching summer months when demand for electricity peaks due to extreme temperatures. The loss of this crucial energy source could lead to significant disruptions in power supply, exacerbating the already strained electricity situation in Iraq.
As Iraq grapples with this energy challenge, the government is looking for alternatives, but it remains unclear how quickly these solutions will be implemented to avoid an imminent energy crisis.