U.S. Likely to Con­tinue Iran Sanc­tions Waivers for Iraq

Iran News - - FRONTPAGE -

WASH­ING­TON (Dis­patches) - Iraq won’t be left hang­ing amid Wash­ing­ton’s sanc­tions on Iran, which sup­plies al­most half of its elec­tric­ity, ex­perts fa­mil­iar with U.S. pol­icy say.

The Pres­i­dent Don­ald Trump ad­min­is­tra­tion in Novem­ber granted Iraq a 45-day waiver to con­tinue its en­ergy pur­chases — and at the risk of set­ting off more in­sta­bil­ity in the coun­try, the U.S. is now ex­pected to con­tinue al­low­ing trans­ac­tions with Iran un­der yet-to-be-de­cided con­di­tions.

But the sanc­tions pro­vide a new ur­gency to ac­com­plish some­thing Bagh­dad and Wash­ing­ton have been pur­su­ing for some time: re­duc­ing the war-weary coun­try’s eco­nomic re­liance on Tehran.

“I think that the U.S. is go­ing to try to find a work­around for Iraq,” Richard Nephew, who served as the State Depart­ment’s lead sanc­tions ex­pert for ne­go­ti­a­tions with Iran from 2013 to 2014, told CNBC. “The U.S. gov­ern­ment knows that Iraq is a key coun­try in the com­pe­ti­tion start­ing be­tween the United States and Iran.”

And after bil­lions spent on years of war and oc­cu­pa­tion, Wash­ing­ton has a real in­ter­est in Iraq’s suc­cess, he added, “not least of which is as a bul­wark against Iran.” A de­ter­mi­na­tion will be made to ex­tend Iraq’s waiver, a state depart­ment of­fi­cial told CNBC, though a de­ci­sion has yet to be reached.

Iran is Iraq’s third-largest trad­ing part­ner, with an es­ti­mated $12 bil­lion in cross-bor­der trade per year, and the ma­jor­ity-Shia coun­tries share strong cul­tural, re­li­gious and ge­o­graphic ties. And de­spite be­ing OPEC’s sec­ond­largest pro­ducer of oil, Iraq is de­pen­dent on Ira­nian nat­u­ral gas plants for up to 45 per­cent of its elec­tric­ity — a setup now fac­ing po­ten­tial jeop­ardy amid U.S. sanc­tions.

With­out con­tin­ued sanc­tions ex­emp­tions, Iraq could lose around a third of its power overnight, en­ergy an­a­lysts say. Al­ready bur­dened by fail­ing in­fra­struc­ture, pock­ets of ISIS ac­tiv­ity and poor pub­lic ser­vice pro­vi­sion, the sce­nario makes Iraq a “tick­ing time bomb,” ac­cord­ing to Michael Stephens, a re­gional ex­pert at the Royal United Ser­vices In­sti­tute in Lon­don. Over the sum­mer, Iraq failed to pay its elec­tric­ity bill to Iran on time. This prompted Tehran to cut the power off and trig­gered wide­spread protests in the coun­try’s south, par­tic­u­larly in poverty-stricken Basra, where gov­ern­ment build­ings and the con­sulates of Iran and the U.S. were at­tacked. While mil­lions of Iraqis main­tain a loy­alty to Iran — par­tic­u­larly for its role in sup­port­ing the Shia mili­tias that played a piv­otal role in the de­feat of ISIS — many still de­scribe its clout in the coun­try as detri­men­tal to sta­bil­ity and eco­nomic devel­op­ment.

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