IFP Exclusive

Iraq: US banking sanctions hindering repayment of energy debt to Iran

Iraq's Minister of Electricity Ziad Ali Fadhil says Baghdad has fully paid its debt to Iran for energy purchases, but a number of banking issues caused by US sanctions are preventing the transfer of the sum of money to the Islamic Republic.

He said Iran had cut gas supplies to Iraq in a new effort to make the Arab country pay its debts for previous energy imports.

The minister said gas shortages in his country lowered the level of electricity production from 26,000 megawatts to 20,600 in recent days, triggering power outages in some areas.

Baghdad, he said, started intensive talks with Iran for a resumption of gas supplies that he said had been slashed by nearly a half because of unpaid debts.

“We hope they (Iranians) would understand Irag’s situation and the hot temperatures in the country and restore gas exports to previous levels,” said the minister.

Earlier, Iranian authorities said they hoped Iraq would soon give Iran access to over $10 billion worth of funds that remain frozen in an account in the Trade bank of Iraq (TBI) because of US sanctions.

Iraqi and US authorities had indicated in statements last month that the Central Bank of Iran would be able to access the funds for paying for imports, but the bank seems to have been unable to clear the account.

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