Iraq is reportedly facing a severe energy shortfall following the U.S. decision to end a waiver that previously allowed Baghdad to purchase electricity from Iran. 

According to a Reuters report citing energy sources, Iraq has no immediate alternatives to replace the energy imported from Iran, posing a significant challenge in meeting domestic electricity demand, particularly during the summer months when temperatures rise above 50°C (122°F).

The waiver’s termination, announced on Sunday, is part of President Donald Trump’s “maximum pressure” campaign on Iran, aiming to prevent the regime from acquiring a nuclear weapon.

The waiver was first introduced in 2018 when Washington reimposed sanctions on Tehran after Trump withdrew from the nuclear deal with Iran, negotiated under President Barack Obama. At that time, Trump imposed sweeping U.S. sanctions on any country purchasing Iranian oil, with Iraq being granted a waiver as a “key partner” of the U.S.

A senior official from the Ministry of Electricity told the Associated Press that the ministry had not yet received official notification about the U.S. decision. He explained that Iraq could lose approximately 8,000 megawatts of energy from power stations relying on Iranian gas, in addition to another 500 megawatts of electricity supplied directly by Iran.

Ahmad Moussa, a spokesperson for Iraq’s Ministry of Electricity, warned that if gas imports are also banned, Iraq could lose more than 30% of its total electricity supply. 

In response, a senior official from Iraq’s Ministry of Electricity told Reuters that the government is taking urgent steps to mitigate the impact of the U.S. decision on the country’s power grid.

Iraq’s energy crisis comes at a time of heightened financial and political tension. The U.S. holds roughly $100 billion of Iraq’s financial reserves, giving Washington significant leverage in negotiations. Additionally, about 2,500 U.S. troops remain stationed in Iraq to assist in counterterrorism operations.