Iraqi Prime Minister Mohammed Al Sudani and his delegation met with U.S. officials at the White House last week to discuss bilateral security, trade, economic, and energy issues. While the official agenda was focused on these topics, sources close to the meetings revealed that the main purpose was to negotiate a reduction in Iraq’s imports of gas and electricity from Iran in exchange for sanctions waivers and financial assistance from the U.S.
Despite Iraq’s recent five-year deal to import significant amounts of gas and electricity from Iran, Prime Minister Al Sudani made promises to decrease these imports and increase the involvement of U.S. companies in Iraq’s oil and gas sector. However, previous broken promises by Iraqi governments raise doubts about the possibility of these commitments being fulfilled. Despite Iraq’s recent agreement with Iran to import gas and electricity for five years, Al Sudani made assurances to the U.S. about reducing these imports and increasing involvement of American companies in Iraq’s oil and gas projects.
Corruption within Iraq’s government remains a significant obstacle for Western companies seeking to do business in the country. Transparency International has labeled Iraq as one of the worst countries for corruption and governance indicators, highlighting issues such as embezzlement, procurement scams, and money laundering that hinder effective state-building and service delivery.
The U.S. government has experienced Iraq’s pattern of promising to reduce imports from Iran and then failing to follow through on those commitments. Previous instances where Iraq continued to import gas from Iran despite promises to the contrary have strained relations between the two countries and led to sanctions being imposed on entities involved in these transactions.
Iraq has been a key ally for Iran in circumventing international sanctions through shared oil fields, allowing Iranian oil to be rebranded as Iraqi oil and exported worldwide. Additionally, Iraq’s failure to reduce the flaring of associated gas produced alongside oil drilling raises environmental concerns and hampers efforts to utilize this resource effectively.
Despite Iraq’s repeated pledges to address gas flaring and achieve energy self-sufficiency by 2030, skepticism remains about the country’s ability to fulfill these goals. The recent agreements signed with U.S. companies to reduce gas flaring by 2028 signal a renewed commitment, but past history suggests that challenges lie ahead in achieving these targets.
Overall, the meetings between Iraqi and U.S. officials underscore the complex relationship between the two countries, marked by promises, broken commitments, and the enduring influence of corruption on Iraq’s energy sector. The future trajectory of Iraq’s energy policies and its partnerships with foreign entities will be closely watched as the country navigates these challenges.
By Simon Watkins for Oilprice.com