Impacts of U.S. Sanctions on Iraq’s Energy Sector: Insights from Former Diplomat Ghazi Faisal
On February 18, 2025, former Iraqi diplomat Ghazi Faisal assessed the grave repercussions that recent U.S. sanctions on Iran have imposed on Iraq’s energy landscape.
Faisal highlighted that Iran currently supplies 40% of Iraq’s gas needs, essential for generating approximately 20,000 megawatts of electricity. However, Iraq’s total electricity production requirement stands at 50,000 megawatts, necessitating an intake of 70 million cubic meters of gas daily.
He further noted, “The persistent financial corruption within successive Iraqi governments appears to have deliberately tied the nation’s energy resources and economy to Iran, which has faced decades of economic sanctions related to its nuclear program, missile activities, and support of armed factions.” This interdependence raises significant concerns for Iraq’s economic stability.
Moreover, Faisal pointed out the socio-economic challenges Iran faces, including a staggering 7 million unemployed individuals and over 35 million people living below the poverty line, compounded by soaring inflation rates. These issues not only strain Iran but also negatively impact the Iraqi economy through practices such as extensive currency smuggling and market monopolization.
Faisal warned, “Iraq is poised to face disastrous consequences from the new U.S. sanctions on Iran, particularly as no viable alternatives for gas supply have emerged. This scenario is likely to precipitate a severe electricity crisis in Iraq, especially during the summer months, which could incite significant public and political discontent.”
The historical context reveals that political instability and financial malfeasance in Iraq have hampered the advancement of its energy sector, contributing to its persistent reliance on external energy sources. With the intensification of sanctions against Iran, Iraq’s energy crises are likely to worsen, particularly as energy demand surges with the onset of summer.
In conclusion, the interplay of U.S. sanctions, Iraq’s energy needs, and Iran’s economic troubles creates a precarious situation for Iraq’s energy dependency. The nation must urgently seek effective strategies to achieve energy self-sufficiency to mitigate impending crises.