Saudi and Kuwait to ease Iraq’s energy crisis
Iraqi officials plan to travel to Saudi Arabia to strike an energy supply deal with the kingdom as protests over electricity cuts reach Baghdad.
Iran severed its electricity supply to Iraq’s southern provinces of Ziqar and Meysan last month, saying Iraq had failed to pay its mounting debt to Tehran.
Saudi Arabia and Kuwait are now looking to fill the void.
Kuwait on Saturday also announced it would send 30,000 cubic metres of diesel to Iraq to help with electricity generation in the south. The first shipment was to have been delivered on Saturday.
As a side benefit, the deal would also help the Saudis to curb Iranian influence in Iraq and cut them off from supply routes reaching Syria, where Iran has a presence.
More than 75 per cent of Iraq’s accessible oil reserves are found in the country’s southern provinces.
Gulf countries over the past year have tried to improve relations with Iraq.
Iran over the weekend threatened to block oil exports in the Gulf if moves were put into place to bar Tehran from exporting fossil fuels. The US is imposing sanctions on Iran to try to bar it from exporting oil.
Last month, US Secretary of State Mike Pompeo made Iran a priority during meetings with the Saudi Foreign Minister
Adel Al Jubeir and Iraqi Prime Minister Haidar Al Abadi.
Saudi Arabia intervened in Yemen’s civil war after the internationally recognised government said Iran had been providing arms to the Houthi rebels, who seized Yemen’s capital in 2015.
As for Kuwait, ensuring the safety of its northern border is paramount to the country, which plans on building a commercial centre, Silk City in Subiya that is less than an hour by road from the Iraqi border.
Kuwait is willing to bolster the economy of Iraq, in particular Basra, to quell the possibility of protests spilling over the relatively insecure border.
Kuwait is less aggressive in its policies towards Iran compared to its Gulf neighbours. It does not endorse many of Iran’s policies, but some in the country fear that an economic failure in Iran could ripple through the other Gulf countries.
Al Shall, an economic consultancy and risk assessment company in Kuwait, wrote: “We do not believe that it is in the interest of the region, particularly Kuwait, for the poor conditions there to continue, neither in humanitarian terms nor in security terms.”
Kuwait’s security depends on peaceful relations between Iran, Saudi Arabia and the political stability of Iraq.
Kuwait last year pledged $2 billion (Dh7.36bn) towards the reconstruction of Iraq in a conference hosted in Kuwait City, which dozens of countries attended and pledged at total of $30bn.
That sum was a surprise as Iraq is also set to resume payments to fully meet the $4.6bn still owed to Kuwait in reparations for the destruction of oil production during the Gulf War.