• Iran halted gas exports to Iraq in late December 2025, causing major power outages, but supplies resumed in late February 2026 at reduced levels.
  • The cutoff stemmed from domestic shortages, payment disputes, and U.S. sanctions pressure, slashing Iraq's power by 4,000-4,500 MW—about 30-40% of its generation.
  • Exports restarted February 26, 2026, at 7 million cubic meters per day, amid talks for summer needs, with Iraq seeking stable volumes before peak demand.

Iran has halted gas exports to Iraq, a key source for the country's power generation, according to data from energy analytics firm Kpler. The move, which began in late December 2025, triggered widespread blackouts across Iraq, but supplies resumed in late February 2026 at reduced levels, according to people familiar with the matter.

The cutoff slashed Iraq's power generation by an estimated 4,000-4,500 megawatts, representing roughly 30-40% of its capacity, forcing reliance on costlier liquid fuels and exacerbating chronic electricity shortages that have long hampered economic activity. Efforts to resolve the disruption have hit a snag, with exports restarting at just 7 million cubic meters per day on February 26, 2026, as negotiations continue over summer supply needs.

Sources indicate the halt stemmed from a combination of domestic gas shortages in Iran, unresolved payment disputes, and ongoing U.S. sanctions pressure. Under President Trump, the U.S. revoked Iraq's waiver for payments to Iran, fueling tensions that have led to repeated export interruptions since 2025. Without a stable deal, Iraq risks further blackouts during peak summer demand, potentially straining its fragile grid and sparking public unrest reminiscent of the 2019 protests.

"We are in talks to secure consistent volumes ahead of the high-demand season," said an Iraqi energy official, who spoke on condition of anonymity due to the sensitivity of the discussions. Attempts to reach Iranian officials for comment were unsuccessful. The resumption at reduced levels follows prior dips, including a 40% mid-2025 reduction due to sanctions and a brief halt in January 2026.

Regional energy strains compound the issue, with Iraq's Rumaila oil field suspending operations in March 2026 and Kurdistan's Khor Mor gas field paused from attacks, cutting regional power by 80%. Experts warn that Iraq's reliance on Iranian gas, amid Iran's own shortages and geopolitical volatility, underscores urgent needs for diversification. In the short term, all eyes are on whether the current flows hold, as millions of Iraqis brace for another sweltering summer.