Barham Salih: Iraq Should Not Bear the Burden of US Sanctions Against Iran

The new President of Iraq, Barham Salih, stated on Sunday, November 20, that Baghdad will continue its negotiations with the United States regarding sanctions on Iran, and the US must consider Iraq's special circumstances in this matter. According to Reuters, Salih, who is visiting Kuwait, told reporters: "We do not want Iraq to bear the burden of US sanctions against Iran." Washington, which began its second round of extensive sanctions against Iran on November 6, has stated that Iraq can continue to import natural gas and electricity from Iran, but this period is limited to 45 days, provided that Iraq does not pay for Iranian gas in dollars. Salih emphasized that the US should take into account Iraq's political and economic conditions. "Iraq has good relations with Iran, and the people of Iraq also desire good relations with the Arab countries of the Persian Gulf. Iraq wants to maintain balance in its foreign relations. It aims to revive the country's infrastructure and economy, which can be achieved by avoiding conflicts surrounding Iran." Iraq has been importing gas from Iran since the second half of last year. According to two separate contracts, Iran is supposed to export 25 million cubic meters of gas daily to Baghdad and another 25 million cubic meters to Basra. The Baghdad pipeline was inaugurated two years ago, and Iran finally began exporting gas to Baghdad in June of last year. According to British Petroleum statistics, Iraq imported nearly 9 million cubic meters of gas from Iran daily during the second half of last year. No official reports have been published regarding the delivery of Iranian gas to Baghdad this year, but Tehran was expected to deliver about 14 to 17 million cubic meters of gas to the Iraqi capital daily. Iraq pays for Iranian gas in its local currency, the dinar. Recently, the Basra pipeline has also been completed, but issues regarding the opening of the letter of credit (LC) for the delivery of Iranian gas through this route have not yet been resolved. The problem of opening the LC for transferring Iranian gas to Baghdad also took months, and ultimately, the Trade Bank of Iraq (TBI) guaranteed the payment for Iranian gas exports. A letter of credit or LC is a guarantee provided by a bank to the seller to ensure that the buyer pays the amount due at the specified time. Iraq's reliance on imports of gas, electricity, and Iranian goods is significant. Iraq, which faces a severe electricity shortage, has established several power plants in recent years that use gas as fuel. Iran is the only source of gas for these power plants, some of which were also built and launched by Iran itself. Concurrently with the US gas ultimatum to Iraq, the oil ministers of Iraq and Saudi Arabia met in Baghdad on Saturday. Saudi Arabia had previously offered to Iraq that it is ready to construct renewable power plants and export electricity to Iraq. The halt of Iranian electricity exports to Iraq this summer led to widespread protests in the southern regions of the country. In August, Saudi Arabia proposed to Iraq that instead of importing electricity from Iran, it would provide very cheap electricity to this country. Saudi Arabia offered each megawatt-hour of electricity sold to Iraq at $21, which is a quarter of the price of electricity exported by Iran to its western neighbor. Iraq faces a 5,000 megawatt electricity shortage; although several power plants are under construction, the country's electricity needs increase by seven percent annually. According to statistics from the Iranian Ministry of Energy, Iran exported about 7,871 million kilowatt-hours of electricity last year, of which more than 84 percent was delivered to Iraq. Iraq is also one of the largest customers of non-oil goods from Iran. According to the Trade Development Organization report, Iran's non-oil exports (excluding oil, oil products, electricity, and gas) to Iraq in the first half of the current solar year increased by 45 percent compared to the same period last year, reaching over $4.5 billion. Iraq's share of Iran's total non-oil exports is 20 percent.