The US on Wednesday granted Iraq a 45-day sanctions waiver enabling the country to continue importing vital Iranian gas and electricity supplies.
The US Department of State said in a statement that the waiver “ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports.”
The US has applied stringent sanctions on Iran that punish any country trading with it.
The issuance of the waiver came amid fraught US-Iraq ties following a US drone strike that killed a top Iranian general, Qassem Soleimani, near Baghdad International Airport on Jan. 3.
Washington had expressed willingness to extend the sanctions waiver, which was due to expire this week, Iraqi officials told reporters, on the condition that Iraq provide a timeline detailing a plan to wean itself off of Iranian gas dependence.
The two officials said that the US issued the waiver anyway and offered the possibility of a longer time period if Iraq produces the requested timeline.
They spoke on condition of anonymity, because they were not allowed to speak publicly about the matter.
“Iran has proven itself as a highly unreliable source of energy for Iraq. Reducing Iranian energy imports is therefore paramount for Iraq to achieve energy security,” the statement said.
The new waiver gives Iraq just 45 days to show the US that it is making good on conditions to boost domestic gas supply or find alternative sources for power, and lessen its reliance on Iran. The previous waiver, issued in October last year, had given Iraq 120 days.
A senior Iraqi official with knowledge of sanctions negotiations with the US said that the period could be extended again once Iraq submits a technical timetable detailing how it plans to meet gas independence.
“It happened that the United States of America gave us a period of 45 days, and it could be extended in the event of us submitting a timetable regarding Iraqi gas investment,” the official said. “Until now, we have not sent them a timetable.”
Iraq remains highly dependent on Iranian natural gas to meet electricity demands, especially during the scorching summer months when imports account for one-third of consumption.
Late payments by Baghdad for Iranian power and gas have resulted in interruptions in the past few years. In the summer of 2018, that was one factor that lead to destabilizing protests in southern oil-rich Basra Governorate.
The US waiver enables Iraq to avoid penalties while paying Iran billions of US dollars for energy imports. It has been granted successively since November 2018, when the administration of US President Donald Trump reimposed sanctions on Iran.
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