President Trump’s executive order has revoked Iraq’s exemption for importing Iranian gas, potentially intensifying the country’s electricity crisis. Experts warn of social unrest if alternative gas supplies are not rapidly established. The order aims for maximum pressure on Iran while negatively impacting Iraq’s energy landscape, with diplomatic and economic ramifications still unfolding.
On Wednesday, President Donald Trump signed an executive order terminating a waiver allowing Iraq to import gas from Iran for electricity generation. Experts predict that this decision may exacerbate Iraq’s persistent power shortages, further destabilizing the nation’s already precarious political and economic environment. The order aims to exert maximum pressure on Iran, limiting its nuclear ambitions and influence, while also adversely affecting Iraq’s energy and financial systems.
The new regulations direct the Secretary of State to strengthen sanctions against Iran, including revocation of financial waivers and blocking oil exports. Additionally, efforts to diplomatically isolate Iran will be intensified, targeting entities like the Islamic Revolutionary Guard Corps (IRGC) and its affiliates in Iraq. Pro-Iran militias are likely to be included in the sanctions framework.
Harry Istepanian, an independent energy expert, has pointed out that the Iraqi government has already issued preliminary warnings regarding the upcoming summer’s electricity challenges, particularly since Iran may fail to deliver the agreed volume of gas. Iraq is also facing obstacles in establishing a payment mechanism for this fuel. He suggests Iraq might consider joining the Russian Mir payment system or developing gas projects through local oil firms.
Istepanian emphasizes that the impending electricity crisis could threaten Iraq’s political stability and warrant urgent attention from the United States. Without a rapid resolution to replace Iranian gas, Iraq could witness waves of public protests or unrest, especially in southern regions.
Ahmed Musa from Iraq’s electricity ministry stated that the government aims to enhance power generation by adding 35,000 megawatts through steam and gas plants. The ministry seeks foreign investments, international loans, and government funds, with partnerships set with companies like GE and Siemens to bridge the energy deficit over the next few years.
The effects of Trump’s executive order extend to the semi-autonomous Kurdistan Region, where Kurdish authorities are instructed to cease the daily smuggling of oil to Iran. The Kurdistan Regional Government has directed its natural resources ministry to collaborate with international oil companies to expedite Kurdish oil exports following a budget amendment that increased compensation for these companies.
Iraqi lawmaker Jamal Kocher highlighted that while the U.S. measures could have mixed repercussions, they pose a critical challenge for Iraq in finding an alternative to Iranian gas. Although foreign intervention has contributed to chaos, there is potential for positive developments under the new policies, especially if Iraq aligns with U.S. interests.
Despite concerns regarding the dollar’s exchange rate and Iraq’s cash liquidity issues, recent actions indicate a shift away from auctioning dollars at the Central Bank of Iraq. Critics argue that past auctions facilitated currency flow to Iran, worsening Iraq’s liquidity crisis as it moves toward deals with foreign nations for currency resources.
As summer approaches, increasing electricity demands may ignite public discontent, potentially destabilizing Iraq further. This situation underscores the urgent need for effective energy solutions to mitigate the anticipated crises.
The termination of Iraq’s exemption for Iranian gas imports stems from U.S. efforts to impose stricter sanctions on Iran, largely aimed at curtailing its nuclear development and regional influence. Iraq has long relied on Iranian gas to power its electricity infrastructure; losing this source could significantly worsen its ongoing energy crises and provoke social unrest. As the summer season approaches, Iraq faces heightened electricity demands, increasing concerns about public dissatisfaction with power shortages, which may further destabilize its political landscape.
In conclusion, President Trump’s recent executive order to end Iraq’s exemption for Iranian gas imports poses significant challenges for both Iraq’s energy stability and its broader political environment. Experts caution that without prompt alternative solutions to replace Iranian gas, Iraq may face exacerbated electricity shortages, leading to civil unrest. The situation necessitates immediate attention from Iraqi leadership and the international community to develop viable energy strategies and ensure political stability in the region.
Original Source: www.newarab.com
