US Ends Waiver Allowing Iraq to Buy Electricity From Iran

(Bloomberg) -- The US didn’t renew a waiver that allowed Iraq to buy electricity from Iran, according to a foreign affairs adviser to the Iraqi prime minister. 

The decision was “regrettable,” Farhad Alaaldin said Sunday. “As a strategic partner, Iraq expected the US authorities to recognize this partnership, particularly since Iraq’s electricity transactions have always been transparent and fully compliant with sanctions regulations.” The news was first reported by Reuters. 

The US decision ensures that Iran isn’t given “any degree of economic or financial relief” as the Trump administration maintains its maximum-pressure campaign against the country, Reuters said, citing a State Department spokesperson it didn’t identify.

US President Donald Trump said he has written to Iran’s leadership urging the country to negotiate a new nuclear deal, days after it emerged that Tehran’s atomic activities have surged. Supreme Leader Ali Khamenei has rejected talks as long as the US maintains its maximum-pressure campaign. 

“Anticipating this outcome, the Iraqi government pro-actively implemented alternative measures to ensure stable electricity supply and minimize potential disruptions,” Alaaldin said, citing intensified maintenance of existing power stations and accelerated renewable energy projects.

The US threatens sanctions against countries dealing with Iran’s energy industry though waivers have allowed Iraq to import electricity in recent years. The move to end the waiver will have a limited impact on Iraq’s power grid as electricity imports from Iran only accounted for about 4% of electricity consumption in 2023, Reuters said, citing the State Department spokesperson.

(Updates with comments from an Iraqi official.)

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