Iraq loses 2.6 GW of power due to lower Iranian gas imports: electricity ministry

Iraq has lost 2.6 GW of power generation due to lower Iranian gas imports, the electricity ministry said Aug. 10, as OPEC's second-biggest producer continues to suffer from intermittent energy supplies from Tehran.

The electricity ministry is working with the oil ministry to compensate for the loss of supply, the ministry said in a statement.

Iranian electricity exports to Iraq have also been suspended due to domestic power shortages, the managing director of Iran's Electricity Network Management Co., Mostafa Rajabi-Mashhadi, was quoted as saying by state news agency IRNA on Aug. 9.

In 2020, Iran exported around 2 GW of electricity, but that volume has dropped this year to 150 MW due to domestic needs, Rajabi-Mashhadi added.

Iranian intermittent supply of gas and electricity has led to widespread shortages in Iraq this summer, when the temperature has soared to 50 degrees Celsius, especially in the south.

Adding to Iran's outage is the difficulty Iraq is facing in paying billions of dollars of dues to Tehran, which has been under US sanctions since 2018, a status that complicates Baghdad's ability to settle its arrears without the threat of financial repercussions.

US waivers

Since 2018 Iraq has been increasing US pressure to wean itself off Iranian energy imports, which have been subject to reimposed US sanctions since that year.

The US State Department granted another sanctions waiver allowing Iraq to import Iranian electricity until December as it grapples with frequent power outages and lack of domestic capacity, a department spokesman said Aug. 5.

Securing an extension of the latest waiver, which expired July 30, was among the top energy priorities when Iraqi Prime Minister Mustafa al-Kadhimi met with US President Joe Biden at the White House on July 26.

Despite the intermittent supply and US pressure, Iraq's overreliance on Iranian energy imports and delays in capturing its own flared gas for power generation, which is mainly gas-based, is unlikely to abate soon.

Iraq was the world's second-worst flaring nation after Russia in 2020, burning some 17.37 Bcm of gas last year, according to the World Bank. Iraq has been the world's second-worst gas-flaring nation since at least 2016, World Bank figures show.

Cash-strapped and politically-hobbled Iraq has been slow to capture its associated gas, which forms the majority of its production, due to the financial crisis gripping the country and its complicated ties to Iran, which still wields power in its neighbor.

Frequent attacks on power lines and pylons blamed on a resurgent Islamic State have also exacerbated Iraq's power shortages.