Trump announces that he would cancel exemption granted to Iraq

(MENAFN) U.S. President Donald trump announced on Wednesday that he would cancel the exemption granted to Iraq, allowing it to import electricity and gas from Iran, a move that threatens to severely impact Iraq's electricity sector. As part of a new sanctions package on Iran, Trump signed a memo instructing immediate actions, in coordination with the U.S. Treasury Department and other relevant agencies, to ensure that the Iraqi financial system is not used by Iran to evade or bypass sanctions.

The memo indicated that the U.S. Treasury would retract any general licenses, frequently asked questions, or other guidelines that provided Iran or its affiliated groups with financial relief or sanctions waivers, particularly those related to economic support. The memorandum also outlined a sustained campaign to push Iran’s oil exports to zero, including Iranian crude oil exports to China, in coordination with the Treasury and other relevant agencies.

As a result of Trump's decision, Iraq stands to lose nearly 7,000 MW of electricity, as many Iraqi power plants rely on Iranian gas, in addition to 1,200 MW of direct electricity supplied by Tehran. Under the administration of former President Joe Biden, Iraq had been granted an exemption to import over 25 million cubic meters of liquefied gas from Iran, with payments allowed directly to the Iranian government in U.S. dollars. Trump's decision has sparked mixed reactions in Iraq, where the country faces a significant electricity shortage, particularly during the hot summer months.

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