Iraq's electricity ministry has asked the government to raise gasoil imports as a precautionary measure to ensure the country has enough fuel for power generation head of the peak demand summer months.
The request is pending the oil ministry's approval. If authorised, Iraq's gasoil imports could shortly ramp up to 100,000 b/d, almost three times the 35,000 b/d that was imported last month, the oil ministry told Argus.
Iraq typically relies on imported natural gas from Iran to generate electricity for its national grid. But Tehran cut gas supplies to its western neighbour in the last quarter of 2024 because of its own power shortages. Insufficient gas from Iran forced Iraqi power plants to switch to burning gasoil, while private consumers generated power from diesel-run units, further exacerbating fuel shortages.
Iraq's power generation shortage could soon become more acute as gas imports from Iran are at risk of stopping completely. The waivers that allow Iraq to import Iranian electricity and gas without falling foul of US sanctions are unlikely to be renewed given President Donald Trump's "maximum pressure" policy against Tehran. The latest 120-day waiver is due to expire on 7 March.
Meanwhile, Iraq's domestic gasoil production is being curtailed by constraints on crude supply to refineries. Baghdad's commitment to rein in crude production to compensate for past breaches of its Opec+ target has cut available supply for domestic refineries, lowering oil product output, the oil ministry said.
Iraq is seeking to address its electricity issues by looking for investment for new power generation infrastructure. The country plans to build new steam and gas plants that could produce up to 35,000MW of electricity, which would bridge the gap between current electricity supply and demand. Baghdad has approached international engineering companies including GE and Siemens to partner in these projects, according to electricity minister Ahmed Moussa, but the government has not disclosed a clear timeline for implementation.
