Iraq Seeking To Trade Food For Iranian Energy Supplies, Officials Say

Baghdad has agreed with Tehran to exchange Iraqi food items for Iranian energy supplies and has requested permission from the United States to extend its sanctions waiver to allow the deal to proceed, Iraqi officials have been quoted as saying.

Two unidentified Iraqi government officials told the Reuters news agency on November 14 that the country needed more time to find alternative sources to Iranian gas supplies to fuel its electrical stations and avoid a "real power crisis."

The United States on November 5 reimposed sanctions on Iran's energy sector that had been eased as part of the 2015 nuclear deal between Tehran and world powers.

However, Washington granted several countries temporary waivers to allow them to continue imports of Iranian energy supplies to avoid hardships. Iraq was given a 45-day waiver to allow it to continue purchasing gas and electricity from Iran.

U.S. officials said the exception would give Iraq time to "take steps toward energy independence."

However, a senior Iraqi government official told Reuters that the U.S. deadline of 45 days to stop importing Iranian gas "is not enough at all for Iraq to find an alternative source."

"Stopping Iranian gas after the deadline will create a real power crisis," the official said.

Iraq finds itself in a delicate position on the question of trade with Iran, as Baghdad sees both Washington and Tehran as allies. While Iraq looks to the United States as a partner in military matters, it has developed extensive economic ties with Iran over many decades.

Meanwhile, with U.S. sanctions cutting into Iran's oil exports and global trade, Iranian businesses have been looking to expand their presence in neighboring Iraq.

With reporting by Reuters