The US government has urged the Iraqi administration to collaborate with the Kurdistan Regional Government (KRG) to address the contractual obligations of American firms operating in the region and to manage outstanding debts.
On Sunday, US National Security Adviser Michael Waltz communicated with Iraqi Prime Minister Mohammed Shia Sudani, emphasizing the necessity for cooperation between the Iraqi central government and the KRG regarding energy contracts.
In his communication, Waltz stated, “The National Security Advisor encouraged the Iraqi government to partner with the Kurdistan Regional Government to resolve contractual issues and ensure the repayment of debts owed to US energy companies.”
Furthermore, Waltz advocated for the establishment of an investment coordinator in Baghdad aimed at facilitating engagement with US companies seeking to invest in Iraq.
Under the prior administration, US officials had emphasized the need for Iraq to expedite the resumption of oil exports to global markets, thereby aiding price stability while highlighting the nation’s reliance on Iranian oil in the face of renewed stringent measures against Tehran.
Despite these calls to action, the Iraqi federal government has yet to reach a resolution with the KRG and international oil corporations regarding payment mechanisms and outstanding financial obligations.
The Kurdistan Oil Industry Association (APCO), representing eight foreign oil companies, has expressed apprehension over the absence of formal agreements related to financial transactions. Compounding these issues, the Iraqi government’s attempts to unilaterally manage revenue-sharing contracts have created additional complexities.
The dialogue between Waltz and Sudani occurred shortly after the expiration of Iraq’s amnesty concerning electricity imports. Waltz highlighted the importance of fostering a mutually beneficial relationship centered on shared security interests and enhanced trade.
He also reiterated that the ongoing pressure on Iran must continue, particularly if the country persists in its nuclear ambitions and support for terrorism in the region, including Iraq. Moreover, Waltz welcomed the Iraqi prime minister’s endeavors toward energy independence and encouraged the Iraqi government to embrace investments from Western, especially US, corporations in its oil and gas sectors.
The Iraqi prime minister reaffirmed his commitment to reinforcing economic ties with the United States, as indicated in a statement from his office following the discussion.
Both officials acknowledged the significance of collaborative efforts to cultivate a robust, self-sufficient Iraq, discussing essential issues and the roles of American firms within this framework.
Waltz stressed the importance of ceasing electricity imports from Iran, a matter intrinsically linked to the US’s pressure strategy, underscoring the need for bilateral coordination to mitigate any anticipated negative impact on Iraq’s stability.
It was noted that the 120-day deadline set by the previous US administration for Iraq to import gas from Iran for powering its electricity plants had expired on March 8, 2025. However, the head of Iraq’s parliamentary finance committee indicated that they were informed by the US ambassador that, “to date, gas exports remain outside the constraints imposed by sanctions.”
These comments followed a meeting on March 9, 2025, between the finance committee chair and US Ambassador to Iraq, Daniel Robinson, along with a delegation from the embassy.
Iraq currently generates 17,000 megawatts of electrical power, with a suspension of Iranian gas imports resulting in a loss of 10,000 megawatts. During the summer, Iraq’s demand exceeds 35,000 megawatts, highlighting that without gas imports, the nation struggles to meet its energy needs.
The finance committee head urged US officials to reconsider the pressures imposed by the US Treasury on the financial and banking sectors, describing them as “targeted sanctions against banks.” He noted Iraq’s efforts to adapt to compliance expectations but expressed concerns over collective sanctions against Iraqi banks, which were enacted without prior notification or justification, significantly impacting the banking sector’s functionality.
