In a deal that avoids US sanctions and gives a lifeline to its power grid, Iraq agreed to swap oil for gas from Iran.
The agreement, announced Tuesday on television by Iraqi Prime Minister Mohammed Shia Al-Sudani. ends Iraq’s longstanding problem with Iran over payments for gas imports. Iraq has been struggling to pay gas dues since Iran came under US sanctions.
Iraq’s power generation fell sharply in recent days as Iran cut 50 percent of gas shipments above quotas, Al-Sudani said. Despite being OPEC’s second largest oil producer, Iraq has trouble meeting its own energy needs as it depends on other countries for energy imports. The US has been pressuring Iraq to end its dependence on Iran and develop its own gas industry.
Iraq said it deposited the required $12.1 billion (€11 billion) in gas dues to the Trade Bank of Iraq, but the bank refused the transfers due to sanctions.
