Iran Cuts Gas Supply to Iraq Over Unpaid Bills
Iran will reduce gas supplies to Iraq over unpaid bills, the Iraqi electricity ministry said in a statement carried by the official Iraqi News Agency on December 27, warning of resulting power outages in the Baghdad and Middle Euphrates areas.
Iran will curb supplies from 5mn to 3mn m3/day, the ministry said, because of the non-payment of gas supplies. It did not say when the cut would be implemented, although the move comes two weeks after Iran reduced sales volumes from 50mn m3/day.
"The reduction will make the supply of electricity almost non-existent in Baghdad and the Middle Euphrates," the ministry said, calling on Iraq's finance ministry to "pay the dues for Iranian gas in order to avoid the loss of electricity."
The electricity ministry said separately it would have a meeting with Iran's energy ministry to discuss the matter on December 29.
The coronavirus pandemic, the collapse in oil prices and Opec+ cuts have plunged Iraq's economy into a severe crisis, leaving the government unable to cover state spending. In October, Iran agreed on settling some of its neighbour's debt for gas supplies by receiving needed medicine and staple goods.
At the same time, Baghdad faces pressure from the US to end reliance on Iranian energy and must repeatedly acquire short-term waivers from Washington covering its imports to avoid US sanctions. Iraq's hope is to import power from Saudi Arabia, Jordan and other countries to ease shortages.