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The United States has given Iraq a 90-day extension to the initial 45-day waiver allowing Baghdad to continue imports of electricity from Iran after the U.S. sanctions on Tehran returned, the U.S. State Department told the Associated Press on Friday.
Major Iraqi power plants are dependent on Iranian natural gas supply, while Iraq also imports electricity from Iran, as Baghdad’s power generation is not enough to ensure domestic supply.
Iraq has argued that it needs more time to find alternative sources of electricity supply, or it risks more and more power outages, which were one of the main reasons for protest rallies in the heart of Iraq’s oil region in the southern city of Basra this summer.
The U.S., for its part, has been urging Iraq to become energy independent, at least energy independent from Iran.
U.S. Energy Secretary Perry visited Iraq last week for talks with the top government officials, including Oil Minister Thamir Ghadhban.
“The Secretary made this trip ahead of the December 18th expiration of Iraq’s waiver from Iran sanctions. During his meetings, he delivered a firm message on behalf of the Trump Administration to the newly formed government that the United States is serious about its desire to help make Iraq energy independent, however further steps are needed to improve the business climate and reduce the malign influence of Iran. These steps include increasing oil production and exports north to Turkey to levels not seen since 2017,” the Department of Energy said last week.
“While the recent agreement between the new government in Baghdad and the Kurdish Regional Government (KRG) has allowed for resumed oil exports through the Iraqi Kurdistan pipeline, work lies ahead to significantly increase exports, increase domestic electricity generation, and decrease natural gas flaring in order to utilize this readily available energy source. Ultimately, these efforts will reduce Iran’s influence on Iraq. The Secretary reiterated that it is a priority of the U.S. government to make this happen and we stand ready to offer our assistance in achieving this goal,” the U.S. DoE noted.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.