WASHINGTON REVIEWS ALL ECONOMIC EXEMPTIONS FOR IRAN… AND IRAQ IS AT THE HEART OF THE CRISIS., 12 MARCH

WASHINGTON REVIEWS ALL ECONOMIC EXEMPTIONS FOR IRAN… AND IRAQ IS AT THE HEART OF THE CRISIS.

The US State Department announced that it is reviewing all economic exemptions that provide Iran with any degree of support, in an escalatory step that could have broad repercussions, especially on Iraq, which relies heavily on gas and electricity imports from Tehran.

State Department spokeswoman Tammy Bruce confirmed that Washington is urging Iraq to speed up its move away from Iranian energy sources. This statement reflects increasing pressure on Baghdad, which finds itself facing a dual challenge of meeting its electricity needs amid a stifling energy crisis, while at the same time avoiding any economic and political repercussions from adhering to US sanctions.

Baghdad between the hammer and the anvil

Iraq relies on Iranian gas to power the power plants that feed most of its provinces, with Baghdad importing about 40% of its energy needs from Tehran. Despite its attempts to diversify its sources, local gas investment projects are still lagging, leaving Iraq in a vulnerable position in the face of any tightening of US sanctions.

The Iraqi government, which previously received periodic waivers from Washington to import energy from Iran, may now face tighter restrictions. If those waivers are removed, it could exacerbate the electricity crisis, especially as summer approaches, when consumption rates rise and power outages are frequent.

Economic and political repercussions

The repercussions of the US decision are not limited to the energy file only, but extend to the Iraqi economy more broadly. Iraq pays part of its Iranian gas dues in Iraqi dinars through frozen bank accounts, which means that any suspension of exemptions could disrupt this mechanism and impose new financial challenges on Baghdad.

Politically, this American pressure puts the Iraqi government before a difficult test, as it must reconcile its strategic relationship with Washington and its economic partnership with Tehran. With tensions rising in the region, any new American move could affect the fragile balance in the Iraqi scene.