<article><p class="lead">The US State Department extended a sanctions waiver enabling Iraq to continue importing electricity from Iran until 6 April.</p><p>The latest waiver is granted for 90 days — a period that, according to the State Department, is sufficient "for the government of Iraq to take meaningful actions to promote energy self-sufficiency and reduce its dependence on expensive Iranian energy."</p><p>Iraq would need at least three years to end reliance on imports of about 1.2 GW of electricity and 40mn cf/d (1.1mn m³/d) of natural gas from Iran to power Iraqi power plant. US waivers allowing such imports to continue typically have been for shorter intervals, and their length has become an informal way to gauge the strength of US-Iraqi cooperation. The most recent waiver was for a period of 45 days, following a 60-day exemption, which came after a 120-day waiver issued in May to signify approval for Iraqi prime minister Mustafa al-Kadhimi's government. </p><p>By that metric, relations appear to be on the mend. "This renewal acknowledges the recent success the US and Iraq have experienced through two rounds of our strategic dialogue and several energy agreements signed by the Iraqi government," the State Department said.</p><p>Al-Kadhimi's visit to Washington in August resulted in $8bn worth of energy deals with Chevron and other US companies, including agreements to develop Iraq's natural gas and electricity infrastructure. But relations have soured since then over what Washington views as al-Kadhimi's inability to rein in Tehran-backed Iraqi militias. The US embassy in Baghdad has come under continuous rocket attacks in recent months. The US has blamed Tehran-affiliated militias for the attacks and has vowed retribution against Iran. But the Pentagon at the same time has drawn down US military personnel in Iraq under orders from President Donald Trump.</p><p>The US sanctions regime that targets Iran does not explicitly prohibit Iraq from importing gas and electricity from its neighbor. But the issuance of waivers insulates the Iraqi banking system from collateral exposure to sanctions as Washington requires Baghdad to prevent Tehran from being able to be paid in US dollars for its exports. </p><p>Iraq has still run up substantial arrears for its energy imports from Iran. Iran's state-owned gas company NIGC last month said it reduced gas supplies to Iraq over debts that have risen to more than $6bn.</p><p>Given the length of the current waiver, the next decision whether to extend it will be made by the incoming administration of president-elect Joe Biden. The Biden administration plans to focus on reopening negotiations with Tehran to resume the normal functioning of the Iran nuclear deal — a process that could result in the lifting of sanctions that encumbered Iran's relations with its foreign customers. </p><p><i>By Haik Gugarats</i></p></article>
