- Iranian gas exports to Iraq have plummeted from 45 million cubic meters per day (mcmd) to just 20 mcmd, triggering a 3,500 MW electricity shortfall.
- The sudden drop, attributed to U.S. sanctions pressure and unpaid debts, threatens summer blackouts and civil unrest in Iraq.
- Iraq is scrambling for stopgap solutions, including diesel generation and Turkish imports, but long-term energy independence remains years away.
A Sudden Energy Shock
Iranian gas flows to Iraq have halved in recent hours, slashing electricity generation capacity by roughly 3,500 MW—enough to power 2.5 million homes. The Iraqi Ministry of Electricity warned the deficit could widen as temperatures rise, straining a grid already prone to collapse during peak demand. "We are working on emergency measures," said a ministry spokesperson, who declined to specify whether Iran had formally notified Baghdad of the supply cut.
Geopolitical Squeeze
The reduction reflects mounting U.S. pressure on Iraq to wean itself off Iranian energy. Washington has tightened sanctions waivers that previously allowed Baghdad to import Iranian gas, while Iraq’s $8 billion in unpaid energy debts to Tehran has further strained relations. "This is a classic leverage play," said an energy analyst familiar with the negotiations, noting Iran has historically curtailed supplies during debt disputes or political tensions.
Scrambling for Alternatives
Iraq is reportedly increasing electricity imports from Turkey and diverting diesel to power plants, though both solutions are costly and logistically fraught. Longer-term plans to boost domestic gas production—including deals with TotalEnergies and Baker Hughes—remain years from fruition. Without a swift resolution, analysts warn of cascading economic impacts: factory shutdowns, water shortages, and protests reminiscent of 2018’s deadly unrest over power failures.