Iraq Sets Deadline To End Dependence On Iranian Gas, Under US Pressure

Via The Cradle

Iraqi Prime Minister Mohammed Shia al-Sudani said he aims to end Iraq’s $4-billion dependence on Iranian gas by early 2028, outlining a plan to recover flared gas and attract foreign investment during an interview with CNBC published Tuesday.

“We developed a clear vision to address this structural imbalance that affects our ability to generate and produce electricity and provide it to citizens,” Sudani told CNBC’s Dan Murphy in Baghdad.

He said Iraq had signed investment deals with TotalEnergies, Chinese, and Emirati companies to capture and process gas currently burned off at oil sites. “For the first time in Iraq’s history, there is a clear plan and daily action to resolve this issue, with a deadline of early 2028 set for zero gas flaring,” Sudani said.

Gas supplied by Iran powers around one-third of Iraq’s electricity, yet years of neglect, graft, and inadequate investment have crippled the national grid, leaving citizens dependent on expensive, heavily polluting private generators.

Sudani said his administration is pursuing a “multi-pronged” approach, involving cooperation with Chinese, Russian, European, and US companies, alongside Gulf partners.

The prime minister said Qatari investments in Iraq have exceeded $5 billion, while Saudi and Emirati firms are financing several ventures, including a Masdar agreement to generate 1,000 megawatts (MW) of power. “Our economy and our relations have never been one-sided,” he said.

However, renewed western sanctions on Iran pose new challenges to Baghdad’s energy strategy. In August, European powers triggered the snapback mechanism, restoring restrictions lifted under the 2015 nuclear deal. The move could further tighten Washington’s financial oversight of Baghdad, already accused of allowing Iranian-linked transactions.

According to Al-Araby al-Jadeed, senior Iraqi officials said the US is now demanding Baghdad “disengage from Iran,” prosecute resistance leaders, and reform its financial and judicial systems. “The Iraqi financial sector, both public and private, is now under near-total oversight by the US Treasury,” an Iraqi diplomat said.

The Coordination Framework coalition, which includes several Iran-aligned factions, warned that US pressure could serve as a pretext for Israeli strikes inside Iraq. China’s growing presence in Iraq’s energy sector reflects the same diversification drive al-Sudani outlined. 

On September 23, Iraq Business News reported that China Petroleum Pipeline Engineering (CPP) signed a $2.5-billion contract with the Basra Oil Company to build a 950-kilometer seawater distribution network across southern Iraq. 

Beijing’s expanding footprint also includes TotalEnergies’ Artawi field expansion and PowerChina’s $4-billion desalination project in Basra.

Executives from four Chinese oil firms told Reuters their combined production in Iraq is set to double to 500,000 barrels per day (bpd) by 2030, signaling Beijing’s accelerating expansion in OPEC’s second-largest producer.