Iraqi officials have said that the US appears likely to extend the sanctions waivers that enable Iraq to import gas from Iran. Iraq is heavily dependent on natural gas imports from Iran, especially during the summer months when Iraq’s energy requirements soar. Typically, US sanctions prohibit countries, corporations, and other entities from engaging in many kinds of commerce with Iran, and countries that violate these sanctions risk being denied access to US currency. This is especially perilous for Iraq, which has billions of dollars in revenue being held at the Federal Reserve Bank in New York. The waiver, if granted, is expected to extend for three months, or until mid-May.
Ultimately, the US hopes to incentivize Iraq to develop and stabilize its own energy sector, thereby reducing its reliance on imports from Iran. It has threatened to issue sanctions against Iraq itself should Iraq not take sufficient measures to accomplish this goal, which has the potential to create financial and compliance risks for companies working with and in Iraq.