U.S. Might extend waivers on Iraq's energy input from Iran, experts forecast
Shafaq News/ Iraq's $8 billion worth of energy deals with US companies clinched in August 2020 during the prime minister's inaugural visit to Washington have yet to bear fruit, but Mustafa al-Kadhimi will try to drum up support for the country's beleaguered oil and gas sector for a second time this week.
Al-Kadhimi will meet with US President Joe Biden on July 26 in Washington at a time when international oil companies are seeking to exit the country's energy sector, due to what the Iraqi oil minister Ihsan Abdul Jabbar described as the inappropriate investment climate in OPEC's second biggest producer.
Iraq is under pressure to wean itself off Iranian energy, but its inability to capture flared gas is hampering its efforts which are complicated by both internal and external factors.
Matthew Reed, vice president of Washington-based Foreign Reports, said Biden does not want to pick a fight with Baghdad over the waiver.
"An extension is virtually guaranteed given the extreme summer heat," Reed told Platts. "It's another matter entirely whether the Iranians can deliver."
Iraq has suffered from power shortages this year due to intermittent supply of Iranian electricity and gas. Iran is grappling with outages, while Iraq has difficulties in settling billions of dollars in arrears to Tehran without the threat of financial repercussions from the US.
Rachel Ziemba, founder of New York-based Ziemba Insights and adjunct senior fellow at the Center for a New American Security, also expects the waiver to be granted despite Iraq's tough-to-curb dependence on Iranian fuel. If anything, Ziemba said the Iraqis might ask for additional exemptions to make it easier to pay Iran.
Ziemba is also watching whether Kadhimi's White House visit produces any opportunities for US firms to help Iraq roll out renewables or gas-capture projects to reduce flaring.
Iraq was the world's second worst gas-flaring nation after Russia in 2020 and it has held this rank since at least 2016, according to the World Bank.
