Iraq faces hurdles after US ends waiver to buy Iranian energy, PM adviser says

The expiration of a US sanctions waiver permitting Iraq to purchase Iranian energy poses short-term operational difficulties, the Iraqi prime minister's foreign affairs adviser told Reuters on Sunday.

Farhad Alaaeldin said that the expiration of the waiver “presents temporary operational challenges,” adding that “Iraq was committed to its strategic goal of achieving energy self-sufficiency".

The Trump administration revoked Iraq’s sanctions waiver to pay Iran for electricity on Saturday as part of President Donald Trump's so-called campaign of maximum pressure against Tehran.

"The government is actively working on alternatives to sustain electricity supply and mitigate any potential disruptions," Alaaeldin said.

"Strengthening energy security remains a national priority, and efforts to enhance domestic production, improve grid efficiency and invest in new technologies will continue at full pace," he added.

A State Department spokesperson said that the decision "ensures we do not allow Iran any degree of economic or financial relief,” adding that Trump's campaign on Iran aims "to end its nuclear threat, curtail its ballistic missile program and stop it from supporting terrorist groups."

The spokesperson said: "We urge the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible ... Iran is an unreliable energy supplier."

The spokesperson played down the impact of Iranian electricity imports on Iraq's power grid, saying, "In 2023, electricity imports from Iran were only 4% of electricity consumption in Iraq."

Washington seeks to isolate Iran economically and cut its oil revenues to hinder nuclear development—claims Tehran denies, insisting its program is peaceful.

"President Trump has been clear that the Iranian Regime must cease its ambitions for a nuclear weapon or face Maximum Pressure," said National Security spokesperson James Hewitt. "We hope the regime will put the interests of its people and the region ahead of its destabilizing policies."

The US has long urged Iraq to reduce reliance on Iranian energy. The waiver’s removal is also seen as part of Washington’s push for Baghdad to resume Kurdish oil exports via Turkey to help stabilize global prices.

"Iraq’s energy transition provides opportunities for US companies, which are world-leading experts in increasing the productivity of power plants, improving electricity grids, and developing electricity interconnections with reliable partners," the State Department spokesperson noted.