Iraq may have serious issues securing its energy requirements if the US refuses to expand the waiver to an Iraqi bank, the head of the Iraqi bank told AFP on Tuesday, for Iraqi imports of electricity and natural gas.
Major Iraqi power stations rely on the supply of Iranian natural gas, and Iraq imports electricity from Iran, as Baghdad is not adequate to guarantee domestic supplies.
Nonetheless, the USA has continued to waive Iraq’s natural gas and electricity purchasers in recent years, even after the implementation of U.S. sanctions on Iran.
The Iraqi government in Iraqi dinars will end its waiver of payments to Iran next month. If the United States does not, the bank will not extend the exemption.
The Iraqi Trade Bank (TBI) – the head of the Faisal al-Haemus bank, told AFP on Tuesday, will avoid the payments being processed.
‘ When the waiver comes to an end, TBI will not, of course, pay for gas and electricity, or negotiate with an Iranian government. The executive of the branch told the agency absolutely.
He said the bank would not allow it to comply with all rules, including U.S. sanctions against Iranian entities.
Typically, US sanctions work by stopping access by persons or entities dealing with sanctioned countries and companies, as is the case with Iran, to the US banking system.
In the recent U.S .- Iran tensions on Iraq’s soil, Iraq’s energy sector may become collateral damage.
The US. American. President Donald Trump, after the Iraqi parliament had asked the Iraqi government to withdraw foreign troops from the country, imposed sanctions on Iraq earlier this month.
After the attack, the US could prohibit Iraq from accessing a United States-based account, where Iraq is depositing its 90% of Iraqi oil revenues. This could lead to an economic ‘ crisis ‘ in Iraq, according to local officials last week to the AFP.