US advisor urges closer ties with Iraq on energy, security

In a telephone call on Sunday, United States National Security Advisor Mike Waltz and Iraqi Prime Minister Mohammed Shia’ al-Sudani pledged to resume northern oil exports to Turkey and reduce Iraq’s reliance on Iranian gas, reaffirming their commitment to a stronger bilateral partnership.

Mr Waltz also reiterated the US administration’s decision not to renew a waiver permitting Iran to export electricity to Iraq, noting that this policy aligns with President Donald Trump’s “maximum pressure” strategy against Iran. According to Waltz, this pressure could intensify if Tehran continues to develop nuclear weapons capability and support terrorism in the region, including in Iraq.

For his part, Iraqi prime minister Al-Sudani emphasised his government’s ambition to achieve energy independence and called for greater involvement by Western and US energy companies in Iraq’s oil and gas sectors. 

In response, Waltz urged Baghdad to resolve contractual disputes with the Kurdistan Regional Government (KRG) and settle any outstanding debts owed to US energy firms. He further recommended appointing an investment coordinator to support US businesses looking to operate in Iraq.

A statement issued by the Prime Minister’s Media Office confirmed the phone call and underlined both parties’ determination to expand economic and security cooperation. Prime Minister Al-Sudani stressed Iraq’s commitment to reinforcing economic ties with the United States, inviting US investors to tap into Iraq’s growing market and also detailing key reforms aimed at creating a transparent, stable and investor-friendly environment.

As part of the same announcement, the US National Security Advisor encouraged Iraq to increase its reliance on US companies, including within KRG, and to address any obstacles hindering their operations.

Iraq’s energy independence

Both sides agreed on the need for collective efforts to develop a more self-sufficient Iraq, while acknowledging the role of US firms already active in the country. The United States reiterated its support for Iraq’s energy independence and pledged to expedite progress in this regard.

The US National Security Advisor reaffirmed Washington’s enduring commitment to safeguarding Iraq’s security and stability amid regional and international challenges, with both sides highlighting the long-term necessity of continued cooperation to protect Iraqi sovereignty, particularly given the current volatility in the region. 

Waltz added that ending Iraq’s exemption from the ban on Iranian electricity imports is a core aspect of the maximum pressure campaign, underscoring the importance of bilateral coordination to prevent negative repercussions for Iraq’s stability.

“If Iraq does not comply with the United States’ decision and continues to import gas from Iran, it will face economic sanctions or other measures from the United States,” political analyst Ahmad Al-Saadi of the University of Texas told The New Arab.

“This will increase financial pressure on Iraq and threaten sanctions against Iraqi companies and banks involved in dealings with Iran. It also negatively affects relations between Iraq and the United States and intensifies internal pressure due to the ongoing electricity crisis in Iraq. In both scenarios, the Iraqi government finds itself in a genuine predicament between sanctions and an enraged populace,” he added.

Meanwhile, the Association of the Petroleum Industry of Kurdistan (APIKUR) announced on 6 March that representatives of its member companies had met with officials from both the Iraqi government and the KRG to discuss resuming oil exports through the Iraq-Turkey pipeline. 

APIKUR stated that its member firms are prepared to restart exports immediately, provided producers in the KRG receive fair and transparent treatment on par with producers in federal Iraq. They also emphasised the necessity of settling arrears, ensuring reliable payment guarantees and preserving the economic framework established by existing Production Sharing Contracts (PSCs).

“Both Prime Minister Sudani and President Trump’s National Security Advisor Mike Waltz emphasised the urgency of resuming oil exports through the Iraq-Türkiye pipeline as a critical component of Iraq’s energy independence; APIKUR member companies have publicly and privately expressed our clear conditions required to resume exports and willingness to meet to establish fair and transparent agreements,” Myles Caggins, spokesperson for the Association of the Petroleum Industry of Kurdistan (APIKUR), told TNA.

“It is in the best interest of all parties to swiftly reach agreements that result in the resumption of oil exports through the Iraq-Türkiye pipeline. Restoring oil exports through the Iraq-Türkiye pipeline will attract investors and create economic opportunities for all Iraqis,” Caggins added.

The flow of oil through the KRG’s pipeline was halted by Turkey in March 2023 following an International Chamber of Commerce ruling that required Ankara to compensate Baghdad $1.5 billion for unauthorised exports by the KRG between 2014 and 2018, which led to an estimated loss of $19 billion in revenue for Iraq.

APIKUR further highlighted the importance of appointing an independent technical consultant, as stipulated by the revised Budget Law, to verify that oil sales invoices comply with PSC requirements. The organisation also noted that payments owed for oil delivered between October 2022 and March 2023 must be made directly to the companies, without intermediaries or undue delays.