US Intervention Thwarts Turkmen Gas Agreement in Iraq, Intensifying Energy Crisis
Iraq's attempt to import Turkmen gas through Iran has been thwarted due to the United States' "maximum pressure" sanctions. Consequently, Baghdad finds itself increasingly reliant on diminishing supplies from Iran while urgently seeking alternative energy sources.
Reuters reported on Friday that Iraq’s efforts to resolve its ongoing electricity crisis using Turkmen gas via Iran have faltered due to pressure from US sanctions. This situation underscores the continued impact of Washington’s “maximum pressure” campaign on Tehran throughout the region.
Iraq, despite being the second-largest oil producer in the Organization of the Petroleum Exporting Countries (OPEC), has struggled to satisfy domestic energy needs since the US-led invasion in 2003. The reliance of millions of Iraqis on expensive private generators has become a source of social tension and unrest.
Hussain Saad, a butcher from Baghdad’s Kasra neighborhood, expressed his concerns to Reuters about the widespread distress in Iraq, emphasizing, “This isn’t solely my hardship, it’s the hardship of the entire Iraqi population,” as he fretted over the potential spoilage of his inventory due to the sweltering temperatures.
The halted agreement, introduced in 2023, outlined a plan for Turkmenistan to provide over 5 billion cubic meters of gas each year via Iran’s National Iranian Gas Company. Under the proposal, Tehran was to retain approximately 23% of the supply to meet its own demands. Despite Baghdad’s offer of third-party oversight to guarantee adherence to sanctions, US authorities declined to sanction the initiative.
Adel Karim, the energy advisor to the prime minister, stated that advancing with the Turkmen deal could potentially lead to sanctions on Iraqi banks and financial institutions, resulting in the suspension of the contract.
The recent collapse highlights the complex predicament facing Iraq, as it grapples with its dependency on Iranian gas, which fulfills approximately one-third of its energy generation requirements, alongside US-imposed sanctions that halt sanctioned transactions. The cessation of US waivers in March prompted a significant cut, resulting in a reduction of 3,000 megawatts of capacity, which previously provided power for 2.5 million households.
Baghdad is accelerating efforts to diversify its energy sources. Authorities are actively seeking to import liquefied natural gas (LNG) from Qatar and Oman through a floating terminal. Concurrently, Iraq is entering into multibillion-dollar agreements with global energy corporations such as TotalEnergies, BP, and Chevron to harness gas that is currently being flared in conjunction with oil extraction.
Simultaneously, disagreements concerning Kurdish oil fields highlight how internal divisions hinder Iraq’s capacity to utilize its own resources effectively, as exports through Turkey’s Ceyhan pipeline have come to a standstill since 2023.
The Kurdistan Regional Government has faced significant challenges as its high-quality crude oil revenues have diminished due to ongoing legal disputes with Baghdad and the closure of its pipeline. This has consequently restricted its role in bolstering national energy security.
Karim announced the expansion of gas-fired power plants, emphasizing the need for increased gas supplies and additional sources.
