ERBIL, Kurdistan Region of Iraq - Washington urges Baghdad to eliminate its dependence on Iranian energy sources, a transition that would in turn provide opportunities for US companies to develop Iraq’s electricity sector, a US State Department spokesperson told The New Region.

The US on Saturday did not renew a sanctions waiver for Iraq to purchase Iranian electricity. The move is defined by Washington as part of President Donald Trump’s maximum pressure campaign “designed to end Iran’s nuclear threat, curtail its ballistic missile program, and stop it from supporting terrorist groups.”

“We urge the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible and welcome the Iraqi Prime Minister’s commitment to achieve energy independence,” a US State Department spokesperson told The New Region on Sunday. “Iran is an unreliable energy supplier.  It is unable to meet its own domestic demand, let alone export. “

The State Department spokesperson added that a complete transition by Iraq would provide opportunities for US companies “which are world-leading experts in increasing the productivity of power plants, improving electricity grids, and developing electricity interconnections with reliable partners.”

The New Region understands that Iraq imports around 500 Megawatts of electricity from Iran, mainly in Diyala province, an amount that does not make up a large amount of the country’s power grid.

According to the state department spokesperson, “in 2023, electricity imports from Iran were only four percent of electricity consumption in Iraq.”

However Iraq does import gas from Tehran to fuel its power stations.

Iranian gas supplies account for between 30 to 40 percent of Iraq’s energy needs. These imports are especially crucial during the summer months when temperatures can reach 50°C and energy demand peaks. 

In a meeting with the US Embassy’s Charge d’Affairs on Sunday, the head of the Iraqi parliamentary finance committee had warned of the “disastrous” consequences of halting gas imports from Iran.

“It will cause the collapse of the national electricity system, due to the lack of any alternatives at the present time,” Atwan al-Atwani had told Daniel Rubinstein according to a statement from the finance committee.

In return, Rubinstein had told Atwani that “the import of natural gas is still outside the sanctions system,” according to the same statement.

However the spokesperson of the Iraqi Ministry of Electricity told The New Region on Sunday that the country is preparing alternatives in case all energy imports from Iran are stopped.

“We are working to find alternative solutions to prevent any power crisis, especially during the summer,” Ahmed Moussa told The New Region, adding that “gas imports from Iran have already been halted for over two months due to maintenance.”

“The ministry is diversifying gas and energy sources, utilizing domestic gas fields, stopping the flaring of associated gas, implementing combined-cycle power projects, expanding solar energy initiatives, strengthening electrical grid connections with neighboring countries, and transitioning buildings to solar energy,” Moussa added.

According to Moussa, the Iraqi Ministry of Oil has already been directed by the government to import 600 million standard cubic feet per day of liquefied natural gas (LNG) by establishing gas platforms at al-Khor Port, with a completion deadline of June 1, 2025.

The project will provide the country with 4,000 megawatts of electricity.

Electricity Minister Ziad Ali Fadhil revealed in mid-February that they are working “with General Electric and Siemens to generate around 35,000 megawatts.”

Additional reporting by Bizhar Shareef and Gashtyar Akram.