Iraq’s reliance on imported gas continues to hinder its energy independence. [Getty]
Iraq is struggling with a deepening electricity crisis, with widespread power outages lasting up to seven hours daily across much of the country. The situation is even worse in the Iraqi Kurdistan Region, with blackouts stretching to 19 hours a day, leaving residents and businesses facing mounting frustrations.
The crisis is exacerbated by regional dynamics. Iran, facing its own winter energy demands, has reduced gas exports to Iraq. Iranian officials have implemented electricity rationing and reported fuel shortages, leading to power plant shutdowns. These challenges have strained Iraq’s overstretched power grid, making it harder to meet the country’s growing energy needs.
Amid this crisis, Iraqi Prime Minister Mohammed Shia’ Al-Sudani visited Tehran on Wednesday to hold talks with Iranian President Masoud Pazeshkian. The high-level discussions at Saadabad Palace focused on strengthening energy cooperation and implementing previously agreed initiatives.
Iraq remains heavily dependent on Iranian gas, which fuels 60 percent of the country’s power plants.
Disruptions in gas supplies, often caused by pipeline maintenance and heightened domestic demand in Iran during winter, have highlighted Iraq’s precarious reliance on its neighbour. The talks in Tehran aimed to stabilise these imports and provide a more consistent electricity supply for Iraq’s energy needs.
Gas dependency hampers independence
Iraq’s reliance on imported gas continues to hinder its energy independence. Despite a five-year agreement signed in 2024 with Iran to import up to 50 million cubic metres of gas daily, frequent supply interruptions have severely affected electricity generation. Attempts to diversify energy sources through agreements with Turkmenistan have stalled, as bureaucratic delays have left funds for these projects tied up in Iraq’s Trade Bank.
The financial and environmental impact of the crisis is significant. Iraq spends approximately $4 billion annually on gas and electricity imports from Iran, while simultaneously flaring vast amounts of its natural gas. According to the World Bank, Iraq flared 17.374 million cubic metres of gas in 2020, making it the second-largest gas flaring nation globally. This practice represents a major missed opportunity to harness domestic energy resources.
The Kurdistan Region bears the brunt of the crisis, with prolonged outages forcing residents to rely on private generators. These generators are expensive to operate and environmentally damaging, further underscoring the need for a more sustainable energy solution.
Iraq’s energy challenges were compounded by setbacks to the KM250 project in the Kurdistan Region, a $806 million initiative designed to increase gas production by 250 million standard cubic feet per day (MMSCF/day). The project faced major disruption following a drone attack in April 2024, which killed four foreign workers near the Khor Mor gas field.
Operations were suspended after the attack, and the disruption caused the loss of 2,500 megawatts of power, according to local electricity officials. The incident underscored the vulnerability of the region’s energy infrastructure to security threats. Investigations are ongoing, with some officials accusing armed factions linked to Iraq’s Popular Mobilisation Forces (PMF) of involvement in the attack.
Privatisation and infrastructure challenges
Efforts to reform Iraq’s electricity sector through the “Smart Transformation Project” yielded mixed results. While some private companies have successfully improved efficiency and reduced waste, others have struggled, revealing inconsistencies in the project’s implementation.
Experts warn that Iraq’s reliance on regional electricity grid connections offers only a short-term solution. These projects are expected to add just 3,000 megawatts at best, far below Iraq’s rising demand, which is expected to surge as the population doubles by 2050.
As Iraq endures another winter of prolonged blackouts, the crisis highlights the urgent need for sustainable, long-term solutions. Without significant policy changes and investments, Iraq risks a worsening energy crisis that could leave millions facing continued hardship and economic stagnation.
