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Iran appoints Iraq energy envoy amid reduced gas, electricity exports

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Iran appoints Iraq energy envoy amid reduced gas, electricity exports


Abbas Beheshti to follow on settlement of gas export dues

Will also work on oil and oil product trading between two countries

Iraq under US pressure to wean itself of Iranian energy imports

  • Autor
  • Aresu Eqbali and Dania Saadi
  • Editora
  • Daniel Lalor
  • Commodity
  • Energia elétrica Gás natural
  • Tags
  • United States

Iranian oil minister Javad Owji, amid intermittent exports of gas and power to Iraq, has appointed a special energy envoy to help bolster Tehran's ties with its neighbor, which is under US pressure to wean itself off Iranian energy imports.

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Owji, in a ministerial decree published by state energy news agency Shana, appointed Abbas Beheshti to follow up on the settlement of gas export dues and to identify other common interests that include oil and oil product trading and private sector investments in the two countries' oil industries.

Beheshti's duties also include following up on oil-for-goods barter deal or oil in exchange for joint projects with coordination of the National Iranian Oil Co. and Naftiran Intertrade Co., NIOC's sales arm.

He will also follow up on exchange of data regarding shared oil fields. Iran has 28 shared oil and gas fields, 12 of which are with Iraq, according to Iranian state news agency IRNA.

The appointment of Beheshti comes at a time when Iraq is suffering from irregular supply of gas and electricity from Iran, which has reduced export quantities due to rising domestic demand. Iran has cut gas supply to Iraq by 38 million cu m per day from around 40-45 million cu m per day.

US sanctions

Iraq also owes Iran billions of dollars in unpaid energy bills due to its inability to settle them without the threat of US sanctions.

Iraq, OPEC's second-biggest producer, is also under pressure from the White House to wean itself of Iranian energy imports, which have been subject to US sanctions since 2018.

The country has been receiving US waivers since 2018 to continue to import Iranian gas and electricity.

However, Iran wields power in neighboring Iraq, where several political parties represented in the government support close ties with Tehran.

Iraq needs Iranian gas and electricity because of its own domestic shortages.

Iraq flares most of its gas, which is mainly pumped with oil and is subject to OPEC+ quota restrictions, limiting the amount that can be used for power generation.

Iraq -- the world's second-worst flaring nation after Russia in 2020, according to the World Bank -- is seeking the help of international oil companies to help capture the gas being flared and use it in power generation since Baghdad lacks the financial resources to implement such projects.