US Grants Iraq New 60-day Waiver To Import Iranian Gas

The US has granted Iraq a 60-day extension to a sanctions waiver allowing it to import Iranian gas for its crippled power grids, an Iraqi official told AFP on Wednesday.

Baghdad relies on gas and electricity imports from its neighbour Tehran to supply about a third of its electricity sector, worn down by years of conflict and poor maintenance.

The US blacklisted Iran's energy industry in late 2018 but has since granted its ally Baghdad a series of temporary waivers to stave off country-wide blackouts.

In May, Washington granted Iraq a four-month extension as a gesture of good will towards Mustafa al-Kadhemi, who had just formed a cabinet seen as more US-friendly than its predecessor.

The US has pressured Iraq to use the waivers to become independent from Iranian energy, specifically by partnering with American firms, and had been frustrated by the slow progress under the previous premier Adel Abdel Mahdi.

While Kadhemi's cabinet has sought to fast-track such deals, it has been unable stem the near-daily rocket and IED attacks on Western military and diplomatic interests.

On his trip to Washington in August, Kadhemi scored agreements with various US firms for energy development across Iraq, including Chevron, Baker Hughes, Exxon and General Electric.

As OPEC's second-biggest producer, Iraq relies on crude exports to fund more than 90 percent of its state budget, but this year's price collapse has seriously undermined the government's fiscal position.

Photo: IRNA

US Grants Iraq Shortest Sanctions Waiver Yet for Iran Gas

The United States on Thursday granted Iraq a 30-day waiver to keep importing Iranian gas despite American sanctions, two Iraqi officials told AFP, the shortest extension yet.

The US slapped tough sanctions on the Iranian energy sector in late 2018 and has granted Iraq a series of waivers, usually for 45, 90 or 120 days.

Baghdad relies on gas and electricity imports from its neighbor Tehran to supply about a third of its power grid, crippled by years of conflict and poor maintenance.

"This is the final extension," one source at the Iraqi president's office told AFP. 

The source said Washington had been frustrated that Iran was meddling in the government formation process in Iraq.

Adnan Zurfi, who has had close ties with US officials since the American-led invasion of Iraq in 2003, was nominated on March 17 and has a month to pull together his cabinet. 

"The US did not want to put Zurfi in a difficult position by not renewing the waiver," a second senior Iraqi official told AFP, confirming the 30-day extension.

The official said Baghdad had prepared a checklist at the beginning of the last 45-day waiver period of ways the country could decrease its reliance on Iranian oil. 

"But we haven't been able to accomplish any of them because of the circumstances," the source said.

Iraq has been hit by a wave of crises in recent weeks, including the government formation stalemate, collapsing oil prices and the novel coronavirus pandemic. 

OPEC's second-biggest producer relies on crude exports to fund more than 90 percent of its state budget, but the crash to a price of under $30 per barrel puts it in jeopardy. 

The COVID-19 virus has also spread across the country, with nearly 350 confirmed cases and 29 deaths announced by the health ministry. 

Photo: Wikicommons

Iraq to 'Stop' Iran Gas Transfers if US Waiver Ends: Bank

The bank through which Iraq pays for Iranian gas imports to power its grids said Tuesday it would stop processing payments if a crucial US sanctions exemption expires next month.

"We'll stop. As simple as that," the head of Trade Bank of Iraq (TBI) Faisal al-Haimus told AFP.

That could be devastating for Iraq's crippled electricity sector, which has relied on Iran for about a third of its supply, and comes at a time of heightened US-Iran tensions.

Washington slapped tough sanctions on Iran's energy sector in 2018 but has granted Iraq a series of temporary waivers over the last 15 months to allow it to buy gas from Tehran.

Baghdad pays for the imports by depositing Iraqi dinars into an account at the state-owned TBI, which Iran is technically allowed to use to purchase non-sanctioned goods.

But if Iraq's waiver is not renewed next month, TBI would stop processing payments, Haimus said.

"If the waiver ended, of course TBI will not pay for any gas or deal with any Iranian entity over gas or electricity. Absolutely," he said.

"As a bank, the most important thing we have is that we are compliant (with international regulations). That's why people trust us," the chairman added.

Sanctions Threat

Any entity that deals with institutions or countries that are blacklisted by the US could be slapped with secondary sanctions, which restrict its access to US dollars.

The waiver protected Iraq from such sanctions, allowing it to continue importing about 1,400 MW of electricity and 28 million cubic metres (988 million cubic feet) of gas from Iran.

In the meantime, Iran and Iraq agreed on a payment scheme in line with US regulations: a TBI account in Iraqi dinars.

As of last year, Iraq had an outstanding bill of around $2 billion for previous gas and electricity purchases, according to Iranian Oil Minister Bijan Zangeneh.

Haimus declined to disclose how much had been paid into the account or how much was still owed, but told AFP that "disputes" meant Iran had not been able to actually access the money.

"A few payments were made according to this mechanism but the problem is that handling this money was not possible," he said.

Iraq fears being swept up in the spiralling tensions between Iran and the US, both of them allies to Baghdad.

Earlier this month, Iraq's parliament voted in favor of ousting foreign troops—including some 5,200 US forces—following a US drone strike near the Baghdad airport that killed top Iranian and Iraqi military officials.

Outraged by the vote, US President Donald Trump threatened to impose sanctions "like they've never seen before" on Iraq if US troops were forced out.

The US then informed Iraq that it was considering blocking Baghdad's access to a US-based account where Iraq keeps oil revenues that contribute 90 percent of the national budget.

Photo: TBI

Iran Discovers Gas Field Near Persian Gulf

Iran has discovered a gas field near the Gulf with enough reserves to supply the capital for 16 years, state media reported on Sunday. The Eram field contained 19 trillion cubic feet (538 billion cubic meters) of natural gas, the National Iranian Oil Company said, cited by official news agency IRNA.

The oil ministry's Shana website said the field was located in Fars province, about 200 kilometres (125 miles) south of Shiraz.

"Given the volume of 19 trillion cubic feet reserves of in-situ gas and 385 million barrels of gas condensate in Eram field, the revenue from this field will be $40 billion," IRNA quoted an NIOC official as saying.

The amount of gas in the newly discovered field was enough to supply Tehran—a city with an estimated population of around eight million—for 16 years, the official said.

Iran is a member of OPEC which says the country has proven natural gas reserves of 1,197 trillion cubic feet (33.9 trillion cubic meters), the second highest in the world.

Photo: IRNA

Erdogan Vows to Continue Oil, Natural Gas Trade With Iran

Turkish President Recep Tayyip Erdogan vowed Ankara would continue to purchase oil and natural gas from Iran despite US sanctions in comments published on Friday.

The United States reimposed sanctions on Iran after pulling out of the landmark 2015 nuclear deal, and says it aims to reduce Tehran's energy sales to zero.

"It is impossible for us to cancel relations with Iran with regards to oil and natural gas. We will continue to buy our natural gas from there," Erdogan told Turkish reporters before leaving New York where he was attending the UN General Assembly.

Despite this vow, Erdogan admitted Turkey faced difficulty in purchasing oil since the private sector "pulled back because of US threats", NTV broadcaster reported.

"But on this issue especially and many other issues, we will continue our relations with Iran," he promised, adding that Ankara still sought to increase trade volume with Tehran.

He previously criticized sanctions against Iran, insisting that they achieved nothing.

Turkey and Iran have been working closely together with Russia to resolve the eight-year conflict in Syria despite being on opposing sides of the war.

Photo: Wikicommons

Iran Inks Deal to Develop Gas Field in Tense Persian Gulf

Two Iranian companies signed a $440 million agreement Saturday to develop a gas field in the sensitive Persian Gulf, with the oil ministry saying it showed arch-foe the United States could not stop the country with sanctions.

Oil Minister Bijan Namdar Zanganeh said the deal reached between two government-owned firms, Pars Oil and Gas Company and PetroPars, to develop the Balal field would be the first of many.

Tensions have soared in the Gulf since last year when the US began reimposing sanctions on Iran after unilaterally withdrawing from a 2015 deal that put curbs on its nuclear program.

"Signing this contract is ... the beginning of a process," Zanganeh said, quoted by the oil ministry's Shana website.

"This is a sign that we are still functioning with sanctions at their peak... We are alive, we are active and working for Iran's oil industry," the Iranian minister said.

The sanctions, he added, "have not been able to stop the progress of Iranian oil industry and its development."

"We don't want to boast, but the United States cannot stop Iranian oil exports." The Balal gas field is located 90 kilometres south of Lavan island in the Persian Gulf.

The deal aims to reach a production rate of 500 million cubic feet of gas per day over a 34-month period.

Photo: iRNA