Shafaq News- Washington

US President Donald Trump’s renewed threat to punish countries trading with Iran is increasing pressure on Iraq to reduce its dependence on Iranian energy while protecting a commercial relationship worth billions of dollars.

Trump has pledged an “unprecedented” economic campaign against Tehran, describing it as the most severe financial pressure ever imposed on a country. The latest push forms part of Washington’s broader effort to restrict Iran’s access to foreign currency and curb its energy trade.

For Iraq, the pressure reaches directly into the electricity sector. Baghdad has relied for years on Iranian gas to fuel power stations, while previous US sanctions waivers allowed it to purchase Iranian electricity and manage related payments through restricted accounts. Washington has repeatedly pressed Iraq to reduce that dependence and develop domestic energy alternatives.

Imported Iranian gas has at times supported roughly one-third to 40% of Iraq’s electricity generation, leaving the grid vulnerable whenever supplies fall. Recent disruptions have repeatedly cost Iraq thousands of megawatts of generation capacity.

Iraq has been trying to reduce that exposure through domestic gas development, electricity interconnections and alternative fuel supplies. The challenge remains substantial: Reuters cited that Iraq purchases about $4 billion to $5 billion worth of Iranian gas annually.

Read more: The end of a waiver: Iraq's struggle forenergy independence

Tehran’s Wider Trade Network

The pressure on Baghdad comes as Washington targets Iran’s broader network of trading partners.

China remains Iran’s most important oil customer. Reuters reported that China imported about 1.38 million barrels per day of Iranian crude in 2025, with trade structured in ways designed to limit exposure to US sanctions.

Turkiye also maintains significant commercial ties with Tehran, with bilateral trade running at roughly $5 billion to $6 billion annually, much of it linked to energy. The United Arab Emirates has historically served as another important commercial hub, although recent regional tensions have disrupted those ties.

India’s trade relationship with Iran has contracted sharply under sanctions. However, Indian refiners briefly resumed Iranian crude purchases in April 2026 during a period of temporary sanctions relief, with preliminary Kpler data cited by AFP putting imports at about 276,000 barrels per day by mid-April. Reuters had earlier reported that this marked India’s first Iranian oil cargo in roughly seven years.

Russia, meanwhile, has expanded economic ties with Tehran as both countries seek alternative trade and financial channels under Western sanctions.

Read more: Energy crisis now political: US halts key Iraqi gas deal