Iran and Iraq hail energy cooperation as US reins in sanction waivers

ERBIL, Kurdistan Region – Iraq’s oil minister Thamer al-Ghadhban and his Iranian counterpart Bijan Namdar Zangeneh met on Saturday to discuss Iranian gas imports for Iraq’s power stations. However, the US has signaled the sanction waivers it granted to some of Iran’s energy customers will soon expire.

During a press conference following their meeting, Ghadhban stressed the importance of Iran and Iraq’s relationship and efforts at “expanding the horizons of bilateral cooperation in economic fields.”

For his part, Iranian Oil Minister Zangeneh said “the discussions were useful and fruitful, and included many topics of common interest, including cooperation in the oil and energy sectors.”

“The two sides agreed in principle on bilateral cooperation in the development of some small border fields shared between the two countries after technical studies,” he added.

Energy cooperation has continued between Iran and Iraq despite US President Donald Trump’s resumption of sanctions against Tehran’s economy and threats against nations who do business with Iran.

This is thanks to 90-day exemption granted to Iraq on December 21 to continue payments for Iranian electricity and gas imports. Without the imports, Iraq’s already defective electricity network would see rolling blackouts.

Power outages last summer led to serious unrest in Iraq’s southern province of Basra. US diplomatic staff were forced to evacuate and Iran’s consulate was torched.

Officials in Iraq have reiterated their country is not party to the US sanctions on Iran, but have not explicitly declared Baghdad’s non-compliance.

Last week, Iranian President Hassan Rouhani said his country’s oil sales are continuing as expected, noting that the United States would not be able to prevent them from exporting oil and gas and their products.

Trump announced the US withdrawal from the Iran nuclear deal in May last year. This was followed by fresh rounds of economic sanctions on August 6 and November 5.

On Saturday, US special representative for Iran Brian Hook said there would be no further waivers for states deeply dependent on Iranian oil – including China, India, Japan and South Korea

“We are not looking to grant any waivers or exemptions to the import of Iranian crude,” Hook told an industry conference in Abu Dhabi, according to Reuters.

“Iran is now increasingly feeling the economic isolation that our sanctions are imposing … We do want to deny the regime revenues. Eighty percent of Iran’s revenues come from oil exports and this is (the) number one state sponsor of terrorism … We want to deny this regime the money it needs,” he added.

As a close economic and political ally of both the US and Iran, Iraq finds itself in an awkward position. It is unclear whether a special dispensation will continue for Baghdad, or whether Washington will again tighten the screws on Tehran.