Iraq receives 90-day extension to Iran sanctions waiver

Baghdad: The US has granted Iraq a 90-day Iran sanctions waiver to allow it to continue to import electricity from Tehran, the State Department told The Associated Press.
Iraq’s power sector is in disrepair and does not generate enough electricity to meet domestic demand. U.S. sanctions that went into effect in November have threatened to cut the country off from its chief supplier, Iran.
The US initially granted Iraq a 45-day waiver to allow it carry on buying electricity and gas from its neighbour while arranging for new suppliers. Iraq will now have another 90 days where it can continue to pay for electricity imports, the State Department’s public affairs office said. But it is barred from paying for gas imports, or it could face ‘secondary sanctions’ — penalties for doing business with a sanctioned entity, Iran.
President Donald Trump moved to restore tough U.S. sanctions after withdrawing from Tehran’s nuclear accord with world powers in May. U.S. sanctions targeting the country’s energy and finance sectors went into effect in early November, ramping up pressure on Iran’s economy.
The US is encouraging Iraq to break its dependence on Iran and develop its own gas and power generation sectors
. Earlier this month, Energy Secretary Rick Perry visited Iraq with a trade delegation from the Chamber of Commerce to promote US investment in Iraq’s energy sector.
“I’m here to tell you that America and its business community stand ready to assist you,” he said.
Meanwhile, nearby Qatar, already the world’s leading exporter of liquefied natural gas, says it plans to increase gas production by 40 per cent. Most experts, however, agree that Iraq will need at least a year to wean itself off Iranian energy imports, or risk worsening power outages.
Electricity demand peaked at 24 gigawatts this year while domestic production was fixed at 16 gigawatts, leading to lengthy and unpredictable blackouts in the hottest months of summer. (AP)