Iraqi debts to Iran for electricity and natural gas imports has surpassed $5 billion, a board member of the Iranian Oil, Gas and Petrochemical Exporters Association said.
“Iraqi officials claim the money is saved in the Trade Bank of Iraq but it cannot be transferred to Iran due to the US sanctions,” Hamid Hosseini was also quoted as saying by ILNA.
When the Arab authorities say they have settled a part of their debts, it does not mean that Iran has received cash, he added.
No money has been paid to Iran through banking channels and what they have done is pay for a part of Covid-19 vaccines that were sent to Iran from other countries. They have settled a small part of their debts by sending some basic goods to Iran.
Hosseini said the amount of money they owe Iran is accumulating rapidly and they are doing nothing.
Although plans had been made to help Iraq settle its massive debts by monthly installments, the war-ravaged country has fallen short of clearing its outstanding debts.
Stressing that the piled up debts have nothing to do with financial and banking restrictions, he said, "The unsettled dues have accumulated over the past years."
Iraq is the biggest importer of Iranian electricity for more than a decade. It needs more than 23,000 megawatts of electricity for domestic demand but decades of war, civil strife and terror attacks have destroyed its power infrastructure.
Iraq has a 7,000-MW power deficit and large parts of the country have for years struggled with systematic blackouts of several hours a day. The power shortages in part have often led to violent public protests.
Annual power generation in Iran is 77,000 megawatt and average annual export reaches 10,000 MW hours to three neighbors: Iraq, Pakistan and Afghanistan.
In the past, Iran cut power supplies to Iraq in 2015 and 2017 because of unpaid bills. But exports returned to normal several weeks later after Baghdad pleaded with Tehran to resume supplies and said the dues would be settled.
The country depends on Iranian gas to feed three power plants — Rumaila, Shatt al-Basra and al-Najibiyah — to partially offset the blackouts.
Iraq's economy relies almost exclusively on oil revenue paid in dollars, which leaves Baghdad extremely vulnerable to punitive measures the US could take in response to violating the sanctions.
Iran has exported 65 billion kilowatt hours of electricity to Iraq since 2005 worth more than $6.2 billion. The neighbor also is one of biggest regional markets for Iranian exports.
An estimated 25 million cubic meters of gas are exported to the Arab neighbor per day (worth at least $200 million a month).
Exports to Afghanistan
According to the official, close to 100,000 tons of diesel are exported to Afghanistan per day, whereas daily gasoline export has exceeded 300,000 tons.
Referring to the quality of hydrocarbon products sent to Afghanistan, Hosseini noted that most cargos comply with international standards and some may not be compliant with the countries’ new standards that were defined after the Taliban takeover in Afghanistan last August.
Taliban is using Indian experts in labs to check the quality of imported diesel and gasoline, and some Iranian companies have not adapted themselves with the new standards yet, that is why some of their cargos have been rejected.
Unlike Iraqis, there are no worries about getting money from Afghans, as most of them pay cash and they have their own transportation facilities. Afghans also import fuels from Turkmenistan, Pakistan and Uzbekistan.
Hosseini noted that the price of exported fuel to Afghanistan is based on international oil tariffs, although Iranian businessmen give discount to be able to compete with other tradesmen from other nations like Russia.
