Iraq to trade crude oil for Iranian gas to settle debts, secure power

SULAIMANI, Kurdistan Region — Iraq on Tuesday signed a significant agreement with Iran to trade crude oil with natural gas from the neighboring country, ensuring repayment of gas import debts and providing gas needs for national power plants, said Prime Minister Mohammed Shia al-Sudani in a televised speech.

According to a statement issued by the Prime Minister’s office, the agreement came after several days of negotiations between the delegations and technical committees of the two neighboring countries.

“This agreement brings money back to Iraq and alleviates the ongoing problem of gas supplies which directly affects the lives of citizens,” Sudani said.

The gas imports from Iran resumed immediately after the agreement. A total of 10 million cubic meters of gas imports began on Tuesday, and Sudani hopes that the amount will increase in the coming days.

With temperatures approaching 50 degrees Celsius in some southern Iraqi provinces, the agreement could be beneficial for the country to supply power plants that were providing less electricity to Iraqis because of Iran’s gas cutoffs.

Iraq is heavily dependent on Iran for gas imports and power supply, which cover over a third of its needs. The US sanctions on Iran, however, prevented Iraq from paying the $12 billion debt it owed for the gas it imported from the country

Additionally, Iraq signed four agreements with French energy giant TotalEnergies worth $27 billion to develop its oil, gas, and renewable energy sectors to address its energy shortage. The agreements are designated as a crucial step in the country’s journey towards self-sufficiency in gas supplies.

On Tuesday, the US Department of State welcomed the agreement and said it would increase the country’s energy self-sufficiency.

“Minimizing the current practice of gas flaring by capturing the massive amounts of methane being burned away will significantly reduce emissions, improve public health for Iraqis, and utilize captured gas to power Iraq’s electrical grid,” according to a statement issued by the State Department.

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