Iraq’s Strategic Shift in Gas Imports Amid U.S. Sanctions on Iran
In a significant move to secure its energy future, Iraq is turning to Qatar and Oman for natural gas imports. This decision comes in the wake of the United States’ recent cancellation of a sanctions waiver that had previously allowed Baghdad to purchase electricity from Iran. The abrupt policy change has compelled Iraq to seek alternative energy sources to maintain its power generation capabilities.
Background: U.S. Sanctions and Their Impact
Since 2018, Iraq had been benefiting from a U.S. sanctions waiver that permitted the import of Iranian electricity and gas, essential for powering its national grid. However, on March 8, 2025, the U.S. State Department announced the termination of this exemption as part of its “Maximum Pressure” campaign against Tehran. This development poses a substantial challenge for Iraq, which relies heavily on Iranian energy imports to meet domestic electricity demands.
Immediate Consequences for Iraq’s Energy Sector
The cessation of Iranian gas imports threatens to disrupt Iraq’s electricity supply significantly. According to Ahmad al-Abadi, spokesperson for the Iraqi Ministry of Electricity, the loss of Iranian gas could result in a deficit of over 8,000 megawatts in the national power grid. This shortfall is particularly concerning with the approaching summer months, when electricity consumption typically surges.
Strategic Partnerships with Qatar and Oman
In response to the looming energy crisis, Iraq is expediting efforts to diversify its gas import sources. The government has initiated discussions with Qatar and Oman to import liquefied natural gas (LNG). A pivotal component of this strategy involves leasing a floating LNG terminal from UAE-based Breeze Investment. This terminal, expected to be operational by mid-year at the port of Khor al-Zubair, will have the capacity to supply approximately 14 million cubic meters of gas daily, offsetting a significant portion of the deficit caused by the loss of Iranian imports.
Infrastructure Developments in Basra
Concurrently, Iraq is accelerating the completion of a major gas pipeline project in Basra. Initiated 30 days ago under the direct supervision of Prime Minister Mohammed Shia al-Sudani, this pipeline is designed to transport up to 200 million standard cubic feet per day of Gulf gas to Iraq’s power grid. Approximately 30% of the project has been completed, with full operational status anticipated within the next 90 days.
Exploring Additional Energy Partnerships
Beyond immediate measures, Iraq is exploring further collaborations to bolster its energy security. Notably, QatarEnergy recently acquired a 25% stake in Iraq’s Gas Growth Integrated Project (GGAT), partnering with Basra Oil Company and TotalEnergies. This initiative aims to harness Iraq’s natural gas resources more effectively and reduce dependency on external suppliers.
Regional Energy Integration Efforts
Iraq is also advancing regional energy integration projects to diversify its electricity sources. The Gulf interconnection project, set to be completed before June with a capacity of 500 megawatts, aims to link Iraq’s power grid with neighboring Gulf countries. Additionally, plans are underway to strengthen electricity connections with Jordan and Turkey, further enhancing Iraq’s energy resilience.
Challenges and Outlook
While these initiatives represent significant strides toward energy diversification, Iraq faces challenges in swiftly implementing them. Infrastructure development, logistical coordination, and geopolitical dynamics all play critical roles in the successful execution of these projects. Moreover, the urgency imposed by the U.S. sanctions adds pressure to expedite these efforts to prevent potential power shortages during peak demand periods.
In conclusion, Iraq’s proactive measures to engage with Qatar and Oman for LNG imports, coupled with domestic infrastructure projects and regional partnerships, underscore a strategic pivot in its energy policy. These efforts aim to mitigate the impact of U.S. sanctions on Iranian energy imports and ensure a stable and diversified energy supply for the nation.
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