US sanctions force Iraq to seek gas alternatives from Qatar, Oman

Iraq is looking to Qatar and Oman for gas supplies if the US disrupts its energy imports from Iran, says Hamza Abdul Baqi, head of the state-owned South Gas Company.

The Trump administration's decision on March 8 to revoke a sanctions waiver that allowed Iraq to continue paying Iran for electricity underlines Washington’s ongoing "maximum pressure" strategy against Tehran, a State Department spokesperson confirmed, Caliber.Az reports via foreign media.

While electricity has been a key concern, Iraq’s larger trade relationship with Iran revolves around natural gas, which is essential for powering the nation’s electricity plants.

Under a five-year deal extended in March 2024, Iraq imports up to 50 million cubic metres of gas per day from Iran, amounting to around $4-5 billion annually. However, Iraq’s electricity minister has warned that any disruption to this vital supply would reduce the country’s daily electricity output by a third, which currently stands at 27,000 megawatts.

In anticipation of potential cuts to Iranian gas imports, the Iraqi government is set to lease a floating liquefied natural gas (LNG) terminal. Abdul Baqi explained that the LNG terminal, which is expected to be operational by mid-2025, will process gas from Qatar and Oman.

The terminal, based at the port of Khor al-Zubair on the Gulf, will be connected via a 45-kilometre pipeline currently under construction to a distribution point near Basra, one of Iraq’s major oil drilling hubs. The facility will be capable of processing at least 500 million cubic feet (14 million cubic metres) of gas per day—roughly a third of the current supply Iraq receives from Iran.

The government has tasked the Ministry of Oil with securing these alternative sources, aiming to ensure stability in Iraq’s energy supply despite ongoing regional tensions.

By Aghakazim Guliyev