Iraq’s electricity grid lost around 15% of its generation capacity after gas supplies from neighboring Iran were more than halved on Tuesday, highlighting the country’s vulnerability to energy shocks despite its oil wealth.
Iranian gas deliveries currently stand at 25 million cubic meters per day, less than half the 55 million cubic meters agreed under a bilateral deal, Iraq’s Electricity Ministry said in a statement. The lost volumes have resulted in the shutdown of some gas-fired power plants and a loss of about 3,800 megawatts of generation.
High domestic demand combined with maintenance work in Iran was cited as the reason for the drop in gas supply, said Saad Freih, director of the ministry.
The shortfall has strained Iraq’s already fragile power grid at a time of high summer demand and the ministry said it’s coordinating with the Oil Ministry to secure diesel as an emergency fuel.
Iraq, OPEC’s second-biggest oil producer, doesn’t have enough gas to operate its mostly gas-fired power plants and suffers from crippling blackouts every summer when demand peaks. It’s also been trying to reduce the amount of wasteful gas flaring from its own fields, and has been looking at buying LNG for years as a way to fill the shortages.
Iraq receives Iranian natural gas from two pipelines, but flows have been interrupted several times in recent years. In 2023, Iran cut volumes in half because of unpaid bills, which Baghdad said arose due to US sanctions on Iran.