Trump admin ends waiver allowing Iraq to buy Iranian electricity as part of ‘maximum pressure’ campaign

The Trump administration ended a waiver that allowed the Iraqi government to buy Iranian electricity in a renewed effort to choke off Iran’s profits.

National security advisor Mike Waltz told Iraqi Prime Minister Mohammed Shia al-Sudani that the end of the waiver was consistent with President Donald Trump’s “maximum pressure” campaign on Iran as the administration goes all-in on trying to prevent the regime from acquiring a nuclear weapon.

“Waltz welcomed the Iraqi Prime Minister’s efforts to achieve energy independence for Iraq, and encouraged the Iraqi government to welcome more western and U.S. energy companies into Iraq’s oil and gas sectors.” 

Waltz also urged the Iraqi government to resolve its dispute with the Kurdistan Regional Government, where Iraq has been choking off the flow of oil from the Kurdistan region in Iraq to Turkey for years, allowing the region’s continued dependence on Iranian oil. 

It is part of a global push to boost oil supply and keep prices in check, in an effort that would starve Iran and Russia of fuel profits. 

Iran can already enrich uranium to a near-weapons-grade 60%. (Atomic Energy Organization of Iran via AP, File)

“The National Security Advisor urged the Iraqi government to work with the Kurdistan Regional Government to address remaining contract disputes and pay arrears owed to U.S. energy companies, and also requested that the Iraqi government retain an investment coordinator to work with U.S. companies seeking to invest and operate in Iraq,” according to a readout of Waltz’s call with the prime minister. 

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Trump first issued the sanctions waiver for Iraq when he began applying “maximum pressure” on Iran during his first administration.

The waiver only applied to electricity, where Iraqi reliance on Iran has precipitously fallen to just 4%. If the new move expanded to include gas used for power plants, however, it “would cause Iraq to lose more than 30% of its electricity energy,” according to a spokesperson for Iraq’s Ministry of Electricity, Ahmad Moussa, who said the nation is searching for alternatives. 

“There are two ways Iran can be handled – militarily, or you make a deal. I would prefer to make a deal…” – President Donald Trump

Former President Joe Biden continuously renewed the waiver until its expiration on Saturday. 

The U.S. has significant leverage over Iraq – $100 billion of its reserves are held in the U.S., and Washington could wield that leverage amidst Iran’s increasingly firm grip over Iraqi leadership. The U.S. still has a military presence of about 2,500 personnel stationed in Iraq to help fight ISIS. 

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Iran’s Supreme Leader, Ayatollah Ali Khamenei, swatted away the Trump administration’s efforts to lure them to the negotiating table. (Iranian Leader Press Office / Handout/Anadolu via Getty Images)

Trump revealed he sent a letter to Iranian Supreme Leader Ayatollah Ali Khamenei, pushing for Tehran to agree to a nuclear agreement — or face military consequences.

“I’ve written them a letter, saying I hope you’re going to negotiate because if we have to go in militarily it’s going to be a terrible thing for them,” Trump told FOX Business on Friday. “There are two ways Iran can be handled – militarily, or you make a deal,” Trump said. “I would prefer to make a deal, because I am not looking to hurt Iran.”

National security advisor Michael Waltz informed the Iraqi prime minister of the end of the sanctions waiver over the weekend. (John Nacion/Getty Images)

According to nuclear experts, Iran is already enriching uranium to 60%, putting it mere days or weeks away from 90% weapons-grade supply.

On Saturday, Ayatollah Ali Khamenei said Iran would not negotiate with “bullying countries.” 

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Iran currently exports an average of 1.5 million barrels of oil per day, but under Trump’s Feb. 6 executive order, the secretaries of State and Treasury are to work to “implement a campaign aimed at driving Iran’s oil exports to zero.” 

The U.S. is also working to end a sanctions waiver for the Chabahar port in Iran, where India has poured in $370 million to build a trading gateway to the Middle East. 

Next, the U.S. could set its sights on China, which buys up 90% of Iran’s oil outflow.