The Trump administration has revoked a waiver that previously permitted Iraq to pay Iran for electricity imports, as part of President Donald Trump’s “maximum pressure” campaign against Tehran. A State Department spokesperson confirmed the decision on Saturday, stating that the waiver, which had allowed Iraq to meet its energy needs despite U.S. sanctions on Iran, recently expired.
The spokesperson explained that the move aims to deny Iran any economic relief, aligning with Trump’s broader strategy to limit Iran’s nuclear development, curb its missile program, and end its support for militant groups. Since assuming office in January, Trump has intensified pressure on Iran by reinstating stringent sanctions designed to isolate the country economically and reduce its oil export revenues, which are critical to funding its nuclear ambitions.
Iran has consistently denied pursuing nuclear weapons, asserting that its nuclear activities are solely for peaceful purposes. However, the U.S. remains steadfast in its efforts to restrict Iran’s economic and military capabilities.
The revocation of the waiver poses significant challenges for Iraq, which has relied heavily on Iranian electricity to meet its energy demands. Farhad Alaaeldin, an adviser to Iraqi Prime Minister Mohammed Shia al-Sudani, acknowledged that the decision would create “temporary operational challenges.” However, he assured that the Iraqi government is actively seeking alternative solutions to ensure a stable electricity supply and minimize disruptions.
“Iraq’s government is focused on strengthening energy security, enhancing domestic production, improving grid efficiency, and investing in new technologies to reduce reliance on external energy sources,” Alaaeldin stated.
While Iraq had been granted the waiver, the U.S. has repeatedly urged Baghdad to decrease its dependence on Iranian energy. The State Department reiterated this stance, labeling Iran an “unreliable energy supplier” and urging Iraq to sever ties with Iranian energy sources as quickly as possible.
“President Trump has been clear in his position,” said National Security spokesperson James Hewitt. “Iran must abandon its nuclear ambitions and destabilizing activities or continue to face the consequences of maximum pressure.”
The U.S. also used the waiver review process to pressure Iraq into resolving ongoing disputes with the Kurdish region over oil exports. The goal is to boost global oil supply, stabilize oil prices, and further restrict Iran’s oil revenues. Sources indicate that negotiations between Iraq and the Kurdish region have faced significant hurdles.
According to the U.S. State Department, Iranian electricity imports accounted for only 4% of Iraq’s total electricity consumption in 2023, downplaying the significance of these imports. The department highlighted the potential for U.S. companies to assist Iraq in modernizing its energy infrastructure.
“Iraq’s energy transition offers opportunities for U.S. firms, who are leaders in increasing the efficiency of power plants, improving electricity grids, and developing interconnections with reliable energy partners,” the spokesperson stated.
As the situation unfolds, Iraq faces mounting pressure to secure alternative energy sources while navigating the broader geopolitical implications of the U.S. decision to tighten sanctions on Iran. The move underscores the complex interplay between energy security, regional politics, and international sanctions in the Middle East.
