Donald Trump, aiming at Iran, puts a squeeze on Iraq

The Trump administration has revoked a sanctions waiver that allowed Iraq to buy gas and electricity from Iran, intensifying an anti-nuclear campaign against Tehran while disrupting an ally.

US President Donald Trump and Iran's Supreme Leader Ayatollah Ali Khamenei. Iran said on Sunday it would consider nuclear negotiations with the US, but only about external concerns of the ‘potential militarisation’ of the program’ rather than a total shutdown.. Pictures via AFP

The Trump administration has revoked a sanctions waiver that allowed Iraq to buy gas and electricity from Iran, US officials said, intensifying an American pressure campaign on Tehran while complicating ties with a key US partner in the region.

The waiver, which had been renewed by presidents Donald Trump and Joe Biden every four months for years, had allowed Iraq to address its immediate electricity needs by buying power and gas used to generate it from its neighbour.

The decision illustrates how the new Trump administration is dispensing with foreign-policy conventions that even it had followed in previous years, at times creating anxieties for American allies while pursuing its geopolitical aims.

“The decision by the United States not to renew the sanctions waiver for electricity imports is regrettable, as it directly affects the Iraqi people,” said Farhad Alaaldin, foreign-policy adviser to Iraq’s prime minister.

This decision doesn’t reflect a broader shift in the relationship, he said.

Mr Trump in February restored what he calls a policy of maximum pressure on Iran, applying crippling economic sanctions in an effort to prevent the country from developing a nuclear weapon, curb its ballistic-missile program, and further curtail its influence in the region.

“President Trump has been clear that the Iranian regime must cease its ambitions for a nuclear weapon or face maximum pressure,” White House National Security Council spokesman James Hewitt said when asked about the decision.

“We hope the regime will put the interests of its people and the region ahead of its destabilising policies.”

Iran says its nuclear program is peaceful and that it won’t be bullied into negotiations.

For Iraq, the decision comes at a precarious time when the government in Baghdad is navigating the upheaval in the wider Middle East after more than a year of war in which Israel has gone on the offensive against Iran and its militia allies, rolling back Tehran’s influence across the region.

Iraq is also contending with the collapse of the Assad regime in neighbouring Syria, which ended more than a decade of civil war but created new concerns about border security as the fragile new government in Damascus works to consolidate control.

The collapse of the Assad regime and the weakening of Iranian-backed militias such as Hezbollah in Lebanon have caused a political realignment in the region, but also renewed fears of insecurity for countries such as Iraq and Syria that have wrestled for years with weak states and civil war.

The Iraqi government is also facing the possible withdrawal of US and other forces from the country next year more than two decades after the American-led invasion that ousted Saddam Hussein.

The US and Iraq last year reached an agreement for most US troops to leave the country by the end of 2026. The plan, if completed, would allow US forces to gradually withdraw, with some remaining in an advisory capacity and for logistical support for American troops based in Syria under a new bilateral security agreement with Iraq.

In recent years US forces have remained in the country as a part of a coalition fighting Islamic State extremists, who overran much of Iraq and Syria in 2014 before being rolled back by Iraqi and Syrian forces supported by American air power.

The fall of the Assad regime in Syria has raised the risk of instability in the network of alliances that are keeping the group contained.

Days after the regime fell, Iraqi officials visiting Washington expressed concern about the potential resurgence of Islamic State and asked the US to reassess the recently concluded withdrawal agreement.

Mr Trump in his first term in office decided to withdraw US troops from Syria before reversing that decision.

Iran used the chaos in Iraq after the American invasion to spread its military and political influence, including by arming militias that have attacked US forces.

Oil-rich Iraq has improved its electrical infrastructure in recent years, lessening its dependence on Iranian electricity. In 2023, imports from Iran were only 4 per cent of electricity consumption in Iraq, according to the US embassy in Baghdad.

An Iraqi soldier walks past a Ramadan sign in the Karrada district of the capital Baghdad last week. Picture: Ahmad al-Rubaye / AFP

The chairman of Iraq’s parliamentary finance committee, Atwan Al-Atwani, said on Sunday that Iraq aimed to achieve energy self-sufficiency but that completing that task would take some years. After a meeting the US ambassador in Baghdad, he asked Washington to reconsider its pressure policies on Iran, according to the Iraqi state news agency.

A spokeswoman for the US embassy in Baghdad said the decision to rescind the electricity waiver was in line with the pressure campaign on Iran.

“It ensures that we do not allow Iran any degree of economic or financial relief,” the spokeswoman said of the decision. “We urge the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible,” she said.

The Wall Street Journal