The Iraqi Electricity Ministry has begun paying off its debts for gas imports from Iran that were hindered due to the US sanctions on the Islamic Republic since.
Iranian Petroleum Minister Javad Oji said on Wednesday that the country received $1.6 billion of the debts after a spokesman for Iraqi Electricity Ministry, Ahmed Moussa, told the Iraqi News Agency (INA) on Tuesday that Baghdad would pay the debt within two days.
The Iraqi spokesman issued a statement stressing the necessity to pay the Iranian gas debts overdue since 2020 to prevent a decrease in the quantities of gas flow to the country.
He also thanked Prime Minister Mustafa Al-Kadhimi for his care, direct supervision, and the role of the parliament, which understands the country’s dire need of electricity.
US banking sanctions imposed on Iran hindered payments by Iraq although Iran on many occasions announced receipt of payments.
Last Wednesday, the Iraqi parliament passed an emergency finance bill for "food security and development" -- totaling 25 trillion Iraqi dinars, approximately over $17 billion -- to pay debts to Iran to ensure gas supplies and stop worsening power cuts. Of that, $2.6 billion will be allocated to settling Iraq's gas and electricity debts, as well as for buying further energy supplies from abroad.
Despite its immense oil and gas reserves, Iraq remains dependent on imports to meet energy needs, especially from neighboring Iran, which currently provides a third of Iraq's gas and electricity needs.
Iran had demanded Iraq pay $1.6 billion it owes for gas imports by the start of June to guarantee further supplies, as it is cutting or reducing supplies regularly due to its own shortages.