Iraq, Iran Agree to Barter Gas for Oil to Solve Electricity Crisis

Shafaq News/ Iraq and Iran have agreed to address Iraq's electricity crisis by exchanging gas for oil, according to Prime Minister Muhammad Shia al-Sudani. The deal was forged following a visit by an Iraqi delegation to Iran over the weekend. Under the agreement, Iraq will import 10 million cubic meters of Iranian gas daily in return for black oil.

Iraq is grappling with a severe electricity crisis due to an outdated power grid that cannot meet the surging demand, especially with the recent heat wave intensifying the need for air conditioning.

While the barter agreement is viewed as a temporary solution, Iraq is actively pursuing additional measures to alleviate the crisis. The country aims to boost domestic gas production and explore options for importing electricity from neighboring nations.

During a televised speech, Prime Minister al-Sudani highlighted that the government had been anticipating and diligently working to tackle the electricity crisis since taking office. He noted that gas investment contracts had been signed, providing Iraq with 600 million standard cubic meters of gas for its power plants.

However, al-Sudani disclosed that the supply of Iranian gas to Iraq had ceased on July 1 due to US sanctions imposed on Iran. The Iraqi government's attempts to obtain US approval for money transfers to pay for the gas proved unsuccessful.

Consequently, the Iraqi government decided to engage in a barter arrangement with Iran, allowing for the importation of gas required to meet the electricity demand.

Additionally, al-Sudani announced a reduction in the price of kerosene from 400 dinars per liter to 250 dinars. This step alleviated the financial burden faced by Iraqis struggling to afford electricity.