Iraq’s Electricity Ministry has begun paying off its debt on gas imports from Iran, which have since been hampered by US sanctions on the Islamic Republic.
Iran’s Petroleum Minister Javad Oji said on Wednesday that the country had received $1.6 billion in debt after Iraq’s Electricity Ministry spokesman Ahmed Moussa told the Iraqi News Agency (INA) on Tuesday that Baghdad would become the debtor Pay off debts in two days.
The Iraqi Speaker made a statement emphasizing the need to pay Iran’s gas debt, which has been overdue since 2020, to prevent a fall in gas flows into the country.
He also thanked Prime Minister Mustafa Al-Kadhimi for his care, direct oversight and the role of Parliament, which understands the country’s urgent need for electricity.
US banking sanctions imposed on Iran hampered Iraqi payments, although Iran has announced on many occasions that it will receive payments.
Last Wednesday the Iraqi Parliament Passed Emergency Funding Bill for “Food Security and Development” – a total of 25 trillion Iraqi dinars, roughly over $17 billion – to pay off debts owed to Iran to secure gas supplies and stop the worsening power cuts. Of that, $2.6 billion will be used to pay off Iraq’s gas and electricity debts and to purchase additional energy supplies from abroad.
Despite its immense oil and gas reserves, Iraq remains dependent on imports to meet its energy needs, particularly from neighboring Iran, which currently supplies a third of Iraq’s gas and electricity needs.
Iran had asked Iraq to pay $1.6 billion for gas imports by early June to ensure continued supplies as it regularly cuts or scales back supplies due to its own shortages.