U.S. Position on Kurdistan’s Gas Resources and Iranian Energy Reliance
On March 8, 2025, a spokesperson for the U.S. State Department articulated Washington’s strategic intent regarding Iraq, emphasizing, “We hope that the gas resources and production capabilities of the Kurdistan Region will be beneficial for the entire country.”
The U.S. aims to restrict economic benefits flowing to Iran, reinforcing its commitment by stating, “This move is part of our initiative to ensure that Iran does not receive any economic and financial support.” The spokesman conveyed the hope that all Iraqis can capitalize on the natural gas resources and electricity generation potential in the Kurdistan Region, which presents a chance to enhance domestic relations within Iraq.
U.S. companies are poised to assist the Iraqi government in bolstering natural gas production in the Kurdistan Region, further integrating into Iraq’s energy landscape.
This pronouncement aligns with the recent U.S. government’s decision to revoke a waiver that permitted the Iraqi government to import Iranian gas for electricity generation, a significant facet of the administration’s ongoing “maximum pressure” policy on Iran.
“This decision reflects the president’s national security strategy to prevent the Iranian regime from acquiring financial and economic facilitation,” the spokesperson noted. The U.S. government is urging the Iraqi administration to rapidly eliminate its dependency on Iranian energy resources, welcoming Prime Minister Mohammed Shia Sudani’s commitment to achieving energy independence for Iraq.
The spokesperson pointed out that electricity imports from Iran have historically had minimal impact on Iraq’s electricity supply, noting that in 2023, Iranian electricity accounted for only 4 percent of Iraq’s total consumption.
He highlighted the critical situation, stating, “I cannot rely on Iran as a source for energy supply, as they are unable to meet their domestic needs, let alone provide exports.” This transitional phase in energy creation affords U.S. enterprises the opportunity to innovate power generation methods, advance the electricity sector, and enhance grid connections with trusted partners.
Additionally, the State Department representative underscored that the administration’s pressure strategy aims to “terminate Iran’s nuclear threats, diminish its ballistic missile program, and prevent Iran from providing support to terrorist entities.”
Since 2018, the U.S. has implemented renewed sanctions prohibiting Iraq from engaging in the purchase of Iranian energy. With the recent termination of the waiver allowing for gas imports from Iran, the U.S. has officially ceased this leniency for the final time.
As a consequence of U.S. sanctions on Tehran, Baghdad has been unable to provide direct financial compensation to Iran. However, with U.S. endorsement, Iraq may deposit funds into a designated bank account for humanitarian uses, including medicine and medical supplies.
“President Trump has emphasized that the Iranian regime must abandon its pursuit of nuclear weapons. We sincerely hope the Iranian authorities will consider the welfare of their populace and broader regional stability,” stated James Hitt, National Security Council spokesman.
The U.S. has consistently encouraged the Iraqi government since 2018 to reduce its dependency on Iranian energy. “We urge the Iraqi government to expedite its efforts to cease reliance on Iranian energy resources,” the spokesman reiterated.
Currently, Iraq has a contractual agreement with Iran for the sale of 50 million cubic meters of gas per day, which accounts for approximately 30 percent of the country’s electricity production. However, Iran has recently cut back on its gas and electricity exports to Iraq, highlighting the challenges in this energy dynamic.