Smuggling and sanctions: Iraq caught in crossfire of US pressure

Shafaq News – Baghdad / Washington

A proposed US congressional bill aiming to ban energy imports from Iran could severely impact Iraq’s electricity supply and cut available power, according to oil expert Nabil al-Marsoumi.

Speaking to Shafaq News, al-Marsoumi said the “No Iranian Energy” Act—currently under congressional review—would directly target Iraq’s dependence on Iranian gas and electricity, which together account for about 40% of the country’s energy needs. “The measure would leave the country facing limited and difficult alternatives, especially during peak summer demand."

Iraq has entered the scope of Washington’s expanding sanctions strategy against Iran. The bill—introduced in April by Republican Congressman August Pfluger—is part of President Donald Trump’s broader “maximum pressure” campaign and seeks to halt all Iraqi purchases of Iranian natural gas, which has long supported Iraq’s power sector.

Although Iraq had previously been granted temporary waivers to continue importing Iranian electricity and gas, those exemptions have since expired, and Baghdad is no longer legally permitted to import Iranian gas under the current US sanctions framework.

Meanwhile, Iraq is also facing allegations of oil smuggling through crude blending operations. At the al-Qayyarah field, production stands at 30,000 barrels per day, though only 3,000 barrels are used domestically. “The remaining volume has drawn suspicion, as the field’s heavy, high-sulfur crude holds little standalone market value and may be mixed with Iranian oil to bypass sanctions,” al-Marsoumi noted.

Berth 41 at Khor al-Zubair is believed to be a central point in the suspected trafficking of both crude and black oil. Al-Marsoumi pointed to the State Organization for Marketing of Oil (SOMO)’s acknowledgment of product leakage—particularly through Khor al-Zubair and Umm Qasr—as a possible indicator of organized smuggling activity.

As of August 1, SOMO officially withdrew from its role in transporting crude from production fields to Khor al-Zubair. That responsibility has been handed to oil companies, while SOMO continues to oversee sales. According to al-Marsoumi, the move appears aimed at distancing the organization from mounting operational controversies.