U.S. Sanctions and Opportunities for Gulf and Turkish Companies in Iraq’s Energy Sector
The prospect of U.S. sanctions on Iraq due to its economic ties with Iran raises critical questions about how this situation could be leveraged by Sunni factions to facilitate Gulf and Turkish companies’ investment in Iraq’s energy sector.
Impact of U.S. Sanctions on Iraq’s Economy
Khalifa Al-Tamimi, a political science professor, articulated his views on March 17, 2025, regarding the anticipated effects of U.S. sanctions on Iraq’s economy. He emphasized that these sanctions will likely prompt the Iraqi government to seek swift alternatives, which may include increasing energy imports from Turkey or advancing projects aimed at linking with Gulf countries.
Al-Tamimi highlighted that the entry of Gulf companies into the Iraqi market is contingent upon several factors, including political decisions in their home countries, the availability of financial backing, and the companies’ willingness to engage in government contracts for energy investments.
Challenges with Gulf Investments
Despite the potential opportunities, Al-Tamimi pointed to historical challenges, such as delays in the execution of the Gulf electrical connection project, which underscore the hesitance of Gulf companies to pursue direct investments in Iraq.
With a noticeable decline in Iranian influence in Baghdad, there is an increasing likelihood of enhanced trade collaboration between Iraq and Gulf states as well as Turkey. However, financial constraints and transportation costs remain significant barriers to expanding this cooperation.
As the influence of Iran in Iraq diminishes, there is a growing momentum for exploring strategic alternatives. This includes initiatives centered around electrical interconnections with Gulf nations and heightened energy imports from Turkey.
Sunni Forces Seizing Opportunity Amid Sanctions
Amid this evolving landscape, a pertinent question emerges regarding the potential for Sunni factions to utilize U.S. sanctions as leverage. This could open pathways for Gulf and Turkish firms to actively engage in Iraq’s energy projects. Although the Iraqi government has issued tenders in this sector, a large portion has been awarded to multinational companies, including American firms, with Gulf companies yet to demonstrate a robust inclination for active participation.
In summary, while significant opportunities may arise for Gulf and Turkish companies in Iraq’s energy sector due to shifting geopolitical dynamics, the effectiveness of these engagements will largely depend on navigating the inherent economic and logistical challenges.
