
Can Iraq's Gas Projects Survive Trump's Iran Crackdown?
By Simon Watkins for the OilPrice.com. Any opinions expressed are those of the author(s), and do not necessarily reflect the views of Iraq Business News.
Can Iraq's Gas Projects Survive Trump's Iran Crackdown?
With US waivers on Iranian energy imports revoked, Iraq is under pressure to rapidly develop its own non-associated gas fields..
Click here to read the full report. Tags: Electricity In Iraq, gas production, Iran, sanctions

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Shafaq News
10 hours ago
- Shafaq News
Kurdistan's $110B gamble: A new front in the Baghdad-Erbil oil war
Shafaq News/ More than two years after the suspension of Kurdish oil exports following an international arbitration ruling, tensions between Baghdad and Erbil have reignited once again. This time, the dispute centers on a $110B oil and gas agreement between the Kurdistan Regional Government (KRG) and two American companies. Signed during a high-profile visit by KRG Prime Minister Masrour Barzani to Washington, the deals target the development of strategic gas fields in the Region's al-Sulaymaniyah province. The first contract involves HKN Energy, a US-based company active in Kurdistan since 2007. HKN holds a 62% majority stake in the Sarsang block in northern Kurdistan, alongside ShaMaran (18%) and the KRG (20%), and has extracted over 63 million barrels of oil from the Swara Tika and East Swara Tika fields and employs between 200 and 500 staff across its offices in Erbil and Texas. The second company, WesternZagros, is a Canadian energy firm founded in 2003 and operating in Kurdistan since 2005. Headquartered in Calgary, it manages operations from Erbil and al-Sulaymaniyah and has invested more than $1B in the Region, with main assets including the Kormir and Karmian fields, estimated to contain 5 trillion cubic feet of natural gas and 900 million barrels of recoverable oil. According to KRG officials, the Miran and Topkhana-Kormir fields covered by the agreements are expected to supply 24-hour electricity to the Region and potentially export surplus power to the rest of Iraq. 'This is not just about energy security—it's about political leverage,' local energy analyst Kovand Sherwani told Shafaq News. 'If implemented, these projects could drastically reduce the Region's reliance on Iranian fuel and grant it more bargaining power with Baghdad.' The United States welcomed the deals as a step toward enhancing Iraq's energy sovereignty. A senior State Department official told Shafaq News, 'The United States believes that Iraq will be more stable and sovereign by achieving energy independence and distancing itself from Iran's harmful influence,' the official stated. 'We encourage Baghdad and Erbil to work together to begin gas production as soon as possible,' he added. American energy expert Dr. Paul Sullivan of Johns Hopkins University also told Shafaq News that 'Erbil's decision to strike massive deals with US companies signals closer ties between Kurdistan and Washington in a vital sector, and may imply implicit American support for the Region.' However, he cautioned that 'unless constitutional disputes are resolved through a federal oil and gas law, this move will only deepen the crisis with Baghdad.' The Iraqi government responded swiftly to the deal. The Oil Ministry issued a statement rejecting the deals as 'null and void,' asserting that they violate Iraq's laws and the authority of the federal government. Citing the constitutional status of Iraq's natural resources, Baghdad argued that the KRG has no right to unilaterally sign contracts, especially while operating under a caretaker government awaiting elections, due to possible obligations on future administrations. MP Basim Naghamish, a member of the Parliamentary Oil and Gas Committee, echoed the ministry's stance. 'It is unacceptable for any party to operate independently of the federal government on the oil file. What Erbil has done—signing contracts with foreign companies unilaterally—constitutes a serious constitutional and financial violation. We will use all legal means to stop this unilateral move and protect Iraq's national wealth,' he stated. The deals also triggered a backlash in Parliament, including from some of the KRG's traditional allies, with several Baghdad-based parties within the governed Shiite Coordination Framework accusing the Region of violating revenue-sharing agreements, warning that such unilateral moves could derail national budget negotiations and legislative cooperation. In response, Kurdish officials defended the deals as essential to securing energy stability and financial sustainability in the face of continued delays in federal budget transfers and the suspension of oil exports through Turkiye. The Region has faced mounting liquidity pressures since March 2023, when the International Chamber of Commerce ruled against Turkiye's unilateral export of Kurdish crude, leading to losses exceeding $20B in potential revenue. Economist Mustafa Faraj told Shafaq News the deal could be a 'double-edged sword' for the KRG. 'There's no doubt these agreements represent a major investment opportunity. They could revitalize Kurdistan's economy through infrastructure development, job creation, and expanded power generation.' But, he added, 'They're not a magic bullet. Their success hinges on legal clarity and political stability. If the dispute with Baghdad remains unresolved, investors may hesitate, and implementation could be delayed.' At the same time, the KRG garnered support from Kurdish and American lawmakers, who pointed to Baghdad's repeated delays in disbursing the Region's financial entitlements, including unpaid May salaries, leaving Erbil with no choice but to seek independent solutions to meet its basic energy and fiscal needs. At the core of the legal conflict is Iraq's 'failure' to enact a federal oil and gas law. Article 112 of the 2005 Constitution calls for cooperative management of natural resources between Baghdad and the regions, yet in the absence of binding legislation, both sides have adopted clashing interpretations of the constitution. 'The legislative vacuum has created a constitutional gray zone,' political analyst Yassin Aziz told Shafaq News. 'There is no operational clarity between the center and the regions—especially regarding who oversees which stage of oil production, from exploration to export.' He added that divergent views on federalism itself exacerbate the conflict. 'While Kurdistan believes the constitution grants it real and broad powers, many in Baghdad remain committed to a centralist mindset, viewing any independent economic initiative as a challenge to state authority.' Observers agree that the only long-term solution lies in passing a comprehensive federal oil and gas law that balances regional rights with federal oversight. Yet after nearly two decades of impasse, that breakthrough remains out of reach. In the meantime, Erbil appears determined to proceed, leveraging US backing and investor confidence to solidify its energy sector, though Baghdad must decide whether to double down on legal confrontation—or return to the negotiating table.


Iraqi News
17 hours ago
- Iraqi News
Iran says to submit own nuclear proposal to US soon
Tehran – Iran said Monday it will soon present a counter-proposal on a nuclear deal with the United States, after it had described Washington's offer as containing 'ambiguities'. Tehran and Washington have held five rounds of talks since April to thrash out a new nuclear accord to replace the deal with major powers that US President Donald Trump abandoned during his first term in 2018. The longtime foes have been locked in a diplomatic standoff over Iran's uranium enrichment, with Tehran defending it as a 'non-negotiable' right and Washington describing it as a 'red line'. On May 31, after the fifth round talks, Iran said it had received 'elements' of a US proposal, with Foreign Minister Abbas Araghchi saying later the text contained 'ambiguities'. Foreign Ministry spokesman Esmaeil Baqaei criticised the US proposal as 'lacking elements' reflective of the previous rounds of negotiations, without providing further details. 'We will soon submit our own proposed plan to the other side through (mediator) Oman once it is finalised,' Baqaei told a weekly press briefing. 'It is a proposal that is reasonable, logical, and balanced, and we strongly recommend that the American side value this opportunity.' Iran's parliament speaker has said the US proposal failed to include the lifting of sanctions — a key demand for Tehran, which has been reeling under their weight for years. – 'Strategic mistake' – Trump, who has revived his 'maximum pressure' campaign of sanctions on Iran since taking office in January, has repeatedly said it will not be allowed any uranium enrichment under a potential deal. On Wednesday, Iran's supreme leader Ayatollah Ali Khamenei said the US offer was '100 percent against' notions of independence and self-reliance. He insisted that uranium enrichment was 'key' to Iran's nuclear programme and that the US 'cannot have a say' on the issue. Iran currently enriches uranium to 60 percent, far above the 3.67-percent limit set in the 2015 deal and close though still short of the 90 percent needed for a nuclear warhead. Western countries, including the United States, have long accused Iran of seeking to acquire atomic weapons, while Iran insists its nuclear programme is for peaceful purposes The United Nations nuclear watchdog will convene a Board of Governors meeting from June 9-13 in Vienna to discuss Iran's nuclear activities. The meeting comes after the International Atomic Energy Agency released a report criticising 'less than satisfactory' cooperation from Tehran, particularly in explaining past cases of nuclear material found at undeclared sites. Iran has criticised the IAEA report as unbalanced, saying it relied on 'forged documents' provided by its arch foe Israel. Britain, France and Germany, the three European countries who were party to the 2015 deal, are currently weighing whether to trigger the sanctions 'snapback' mechanism in the accord. The mechanism would reinstate UN sanctions in response to Iranian non-compliance — an option that expires in October. On Friday, Araghchi warned European powers against backing a draft resolution at the IAEA accusing Tehran of non-compliance, calling it a 'strategic mistake'. On Monday, Baqaei said Iran has 'prepared and formulated a series of steps and measures' if the resolution passed. 'Without a doubt, the response to confrontation will not be more cooperation,' he added.


Shafaq News
17 hours ago
- Shafaq News
$12 Billion in Trade: Iran and Iraq deepen commerce
Shafaq News/ Trade between Iran and Iraq approached $12 billion in 2024, the secretary-general of the Iran-Iraq Joint Chamber of Commerce Jehanbakhsh Sanjabi Shirazi revealed on Monday. Shirazi stated that Iran's imports from Iraq reached approximately $754 million, which he described as 'acceptable—though still short of the target—and marked a notable increase compared to 2023 and the average of the past decade.' 'Iran's annual imports from Iraq typically did not exceed $100 million, except for 2022 when imports surged to about $1.07 billion, part of which included feed ingredients purchased through letters of credit from Iraq's TBI bank,' he explained. Looking ahead, Shirazi projected a 20% increase in bilateral trade for 2025, while noting that Iraq remains Iran's second-largest trading partner, expressing optimism that trade volume will surpass $13 billion and reach $15 billion by the end of 2026. However, he cautioned that the Iraqi market is approaching saturation for Iranian exporters, making a significant surge in exports unlikely in the near term. Iran's exports to Iraq through the Mehran border crossing in western Ilam province reached $206.8 million over the past two months, according to provincial customs officials. Overall, trade between the two countries has approached $12 billion annually, with Iran exporting food, petrochemicals, and construction materials. Both sides have signed agreements to boost commerce through joint economic zones and free-trade areas, with Iraqi officials aiming to raise trade volume to $25 billion through coordinated infrastructure and policy efforts.