Iran and Iraq sign controversial five-year contract to continue export of natural gas

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Working pumpjacks are seen in the Montebello Oil Field in Montebello, California, on February 23, 2022. - Stock markets mostly rose and oil prices held relatively steady on February 23 as economic sanctions imposed on Moscow over the Russia-Ukraine crisis were deemed less harsh than expected. Brent crude stood at $96.73 per barrel, having soared to a seven-year high of $99.50 on February 22 on fears of disruptions to key Russian oil supplies. (Photo by Frederic J. BROWN / AFP) (Photo by FREDERIC J. BROWN/AFP via Getty Images)

Despite the Biden administration having ‘strongly suggested’ that Iraqis find other ways solve their production problems, they have signed a new deal with Iran. Iraq’s ministry of electricity announced a finalized agreement on Wednesday, of which the Iran regime has signed a five-year contract to continue the export of natural gas for use in Iraq’s power generating plants.

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Iraq will import up to 50 million cubic meters per day of the vital fuel; prior, Iraq had been procuring approximately half of that amount from Iranian suppliers, according to The Foreign Desk News.

The outlet notes this relationship between American adversaries has often brought criticism from Washington because the imports and their payments are subject to U.S. sanctions. The government in Baghdad must ask for waivers from the State Department to complete their purchases.

The Foreign Desk News goes on to explain:

Iran’s national gas company has been provisioning their neighbor for the last 10 years, as Iraq has long suffered domestic production problems due to corruption and inadequate infrastructure.

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Most of the natural gas that Iraq imports is used to produce power for an unstable and maintenance-prone electrical grid. Service outages are common amid the country’s growing consumption and many residents frequently must rely on private generators during times of disruption.

Including the electricity that Iraq directly purchases from Iran, the Islamic republic is reported to be responsible for supplying nearly a quarter of the country’s total power use.

 

 

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