TEHRAN - The United States has granted Iraq a 120-day extension to a sanctions waiver allowing the Arab country to import energy from neighboring Iran.
Speaking on Saturday, a spokesman for the U.S. State Department said the new measure allows Iraq to import Iranian gas and electricity without facing penalties.
The administration of former U.S. president Donald Trump blacklisted Iran’s energy industry in late 2018 following its unilateral withdrawal from the 2015 nuclear deal, officially called the Joint Comprehensive Plan of Action (JCPOA).
It also put pressure on Iraq to make itself less dependent on Iran’s gas and electricity, but Iraqi leaders say the demand is a bar set too high given the country’s state of infrastructure which is still badly battered decades after the U.S. invasion and sanctions and economic decline.
The U.S. has been enlisting its companies and allies such as Saudi Arabia to replace Iran as Iraq’s source of energy.
Iraq buys gas and electricity from Iran to supply about a third of its power sector.
It currently owes more than $6 billion in arrears and is unable to pay back its debts due to illegal U.S. sanctions against Iran.
Western and Iraqi sources recently told AFP that Washington has given the green light to Iraqi officials to release $2 billion in debts for gas imports to Iran through a Swiss bank account.