The Iraqi Federal Ministry of Electricity announced on Wednesday the signing of a crucial five-year gas import contract with neighboring Iran. The contract, with a significant import volume of 50 million cubic meters per day, is poised to address Iraq's escalating demand for electricity. This volume is subject to variation based on the national grid's requirements, as reported by the Iraqi News Agency (INA).

The Ministry of Electricity underscored that the agreement aims to bridge the gap in electricity supply until the rehabilitation of Iraq's national gas fields is completed. This strategic move comes amidst persistent challenges in meeting Iraq's electricity needs, particularly during peak demand periods.

In exchange for the vital gas imports crucial for powering electrical plants across Iraq, the US administration granted Baghdad new exemptions in March, facilitating the fulfillment of its financial obligations to Iran. This diplomatic maneuver underscores the delicate balance Iraq must navigate in its regional and international relations.

Gas exports from Iran to Iraq commenced in 2017, initially ensuring an average supply of 25 million cubic meters per day. However, in recent years, Iraq has grappled with severe gas shortages, especially during harsh winters. Iran has intermittently reduced its gas exports to Iraq, at times halting the flow entirely, exacerbating electricity crises in the region.

Iraq heavily relies on thermal power plants, which are dependent on gas imports from Iran for approximately one-third of its electricity generation. The new agreement signifies a concerted effort by Iraqi authorities to mitigate the impact of electricity shortages and stabilize the country's power infrastructure.

As Iraq navigates its energy landscape, bolstering partnerships with neighboring countries like Iran remains pivotal to ensuring uninterrupted power supply for its citizens and industries. The five-year gas import deal stands as a testament to the ongoing collaboration between Iraq and Iran in addressing shared energy challenges, while also navigating complex geopolitical dynamics in the region.