US extends waiver to allow Iraq to keep importing Iranian gas

The United States extended an exemption allowing Iraq to continue importing Iranian oil and gas despite US sanctions on Tehran, a US State Department spokesman confirmed.

The spokesman said on Friday that the 90-day extension would allow Baghdad to keep importing Iranian gas that is crucial for Iraqi power production.

"A 90-day waiver was granted to allow Iraq to continue to pay for electricity imports from Iran," the spokesman said, adding that the waiver will apply to both electricity and gas, as reported by Reuters.

The extension deal was reached on Thursday-when a previous 45-day waiver was due to expire-during a visit to Washington by an Iraqi delegation, two Iraqi officials with direct knowledge of the negotiations told Reuters.

President Donald Trump's administration reimposed sanctions on Iran's energy exports in November, citing efforts to curb its nuclear programme and diminish the country's influence in the Middle East, notably its support for proxies in Syria, Yemen and Lebanon.

Washington has granted waivers to several buyers to meet their energy needs and the US president said he intended to "gradually" reimpose sanctions on Tehran's critical gas sector in order to avoid a sharp increase in global prices.

The Trump administration gave Iraq a 45-day waiver for imports of gas from Iran when US sanctions came back into effect on 5 November.

Iraqi officials have said they need about two years to find alternative sources, since the country relies heavily on Iranian gas to feed its power stations.

Iraq imports roughly 1.5 billion standard cubic feet per day via pipelines in the south and east.

Last week, US Energy Secretary Rick Perry urged the Iraqi government to partner with US companies to become more energy independent.

"Working together, the US and Iraq can develop Iraq's oil, gas and water industries," Perry said during a conference in Baghdad, which was attended by the largest-ever US trade delegation to Iraq.

Perry also met Iraqi Prime Minister Adel Abdel Mahdi, as well as Iraq’s oil and electricity ministers, during his visit to Baghdad.

On Friday, the US State Department spokesman said Washington continues to work with Iraq to end its dependence on Iranian natural gas and increase its energy independence.

"These efforts will continue to promote the use of Iraqi natural resources, strengthen Iraq’s economy and development, and encourage a united, democratic, and prosperous Iraq free from malign Iranian influence," the spokesman said.