In March 2025, the Trump administration made a bold move by ending the sanctions waiver that allowed Iraq to import electricity and gas from Iran. This shift, part of a larger strategy to exert pressure on Iran, carries significant consequences for Iraq’s energy sector and raises questions about the future of Iraq’s gas projects.
The Strain on Iraq’s Energy Supply
For years, Iraq has relied heavily on Iranian gas to meet its electricity demands. The removal of this waiver threatens to disrupt a large part of Iraq’s power supply, with summer months particularly vulnerable to shortages. Without access to Iranian gas, Iraq faces the prospect of major power outages, affecting millions of people and potentially straining the country’s fragile infrastructure.
Iraq's Search for Alternatives
To mitigate the looming energy crisis, Iraq is looking for alternative sources of gas. The government has turned to countries like Qatar and Oman for potential energy imports. Additionally, there are discussions to lease a floating LNG terminal from Breeze Investment, based in the UAE, which could deliver up to 14 million cubic meters of gas daily by mid-2025. However, these alternatives may not fully replace the Iranian gas imports in the short term.
Domestic Energy Development and Renewables
In addition to external partnerships, Iraq is working to boost its domestic energy production. One of the major projects underway is a 1,000-megawatt solar power plant in Basra, in partnership with France’s TotalEnergies. While this project holds promise for Iraq's energy future, the benefits will take time to materialize, and it is unlikely to offset the immediate loss of Iranian gas.
Navigating Geopolitical Challenges
The decision to revoke the sanctions waiver puts Iraq in a precarious geopolitical position, caught between balancing its relationships with both the United States and Iran. Iraq’s attempts to reduce dependence on Iranian energy are complicated by regional tensions and ongoing political instability, making it difficult to secure a stable, long-term energy future.
Conclusion
The end of the sanctions waiver signals a tough road ahead for Iraq’s energy sector, with gas projects facing significant hurdles. While Iraq is exploring alternative energy sources and working on domestic solutions, the country must navigate both geopolitical and infrastructural challenges to ensure energy security. How Iraq adapts to these pressures will determine the future of its gas projects and its ability to meet its energy needs.