US gives Iraq sanctions waiver for Iranian gas and electricity imports

Iraq remains highly dependent on Iranian natural gas to meet its electricity demands, especially during the scorching summer months. (AP)
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Updated 13 February 2020

US gives Iraq sanctions waiver for Iranian gas and electricity imports

  • The new waiver gives Iraq just 45 days to show Americans that it is making good on conditions to boost domestic gas supply

BAGHDAD: The US has granted Iraq a 45-day sanctions waiver enabling the country to continue importing vital Iranian gas and electricity supplies.

In a statement on Wednesday, the US State Department said that the waiver “ensures that Iraq is able to meet its short-term energy needs while it takes steps to reduce its dependence on Iranian energy imports.”

The US has applied stringent sanctions on Iran that punish any country trading with it.

The issuance of the waiver came amid fraught US-Iraq ties following an American drone strike that killed the top Iranian general, Qassem Soleimani, near Baghdad airport on Jan. 3.

Washington had expressed willingness to extend the sanctions waiver, which was due to expire this week, Iraqi officials said, on condition that Iraq provide a timeline detailing a plan to wean itself off Iranian gas dependence.

The two officials said that the US issued the waiver anyway and offered the possibility of a longer time period if Iraq produces the requested timeline. They spoke on condition of anonymity.

In its statement, the US State Department said: “Iran has proven itself as a highly unreliable source of energy for Iraq. Reducing Iranian energy imports is therefore paramount for Iraq to achieve energy security.”

The new waiver gives Iraq just 45 days to show Americans that it is making good on conditions to boost domestic gas supply or find alternative sources for power, and lessen its reliance on Iran. The previous waiver, issued in October, had given Iraq 120 days.

A senior Iraqi official with knowledge of sanctions negotiations with the US said that the period could be extended again once Iraq submits a technical timetable detailing how it plans to meet gas independence.

“It happened that the United States of America gave us a period of 45 days, and it could be extended in the event of us submitting a timetable regarding Iraqi gas investment,” the official said. “Until now, we have not sent them a timetable.”

Iraq remains highly dependent on Iranian natural gas to meet electricity demands, especially during the scorching summer months when imports account for a third of consumption.  


Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

Updated 09 August 2020

Aramco profits fall in tough quarter, but sees partial recovery from COVID-19 impact

  • Aramco see’s “partial recovery” from pandemic impact
  • Aramco president says company remains resilient

DUBAI: Saudi Aramco, the world’s biggest oil company, reported a net income of $6.57bn for the second quarter of 2020, the period which witnessed the most volatile oil market conditions for many decades.

The result, announced to the Tadawul stock exchange in Riyadh where the shares are listed, compared with income of $24.7 bn last year.

Amin Nasser, president and chief executive, said: “Despite COVID-19 bringing the world to a standstill, Aramco kept going. We have proven our financial resilience and operational reliability, setting a record in our business operations, while at the same time taking steps to ensure the health and safety of our people.”

Aramco’s dividend - a big attraction for the investors who bought into the world’s biggest initial public offering last year - will remain as pledged, Nasser added. Cash flow in the quarter amounted to $6.106 bn.

““Strong headwinds from reduced demand and lower oil prices are reflected in our second quarter results. Yet we delivered solid earnings because of our low production costs, unique scale, agile workforce, and unrivalled financial and operational strength. This helped us deliver on our plan to maintain a second quarter dividend of $18.75 billion to be paid in the third quarter,” he said.

Aramco said the loss was “mainly reflecting the impact of lower crude oil prices and declining refining and chemicals margins, partly offset by a decrease in production royalties resulting from lower crude oil prices and a decrease in the royalty rate from 20 per cent to 15 per cent, lower income taxes and zakat as a result of lower earnings, and higher other income related to sales for gas products.”

Sales and revenue in the period - which saw oil prices collapse on “Black Monday” in April - fell 57 per cent to $32.861 bn from the comparable period last year. 

Nasser said he was cautiously optimistic that the world economy was slowly recovering from the depths of the pandemic lockdowns.

“We are seeing a partial recovery in the energy market as countries around the world take steps to ease restrictions and reboot their economies. Meanwhile, we continue to place people’s safety first and have adapted to the new normal, implementing wide-ranging precautions to limit the spread of COVID-19 wherever we operate.

“We are determined to emerge from the pandemic stronger and will continue making progress on our long-term strategic journey, through ongoing investments in our business – which has one of the lowest upstream carbon footprints in the world,” he added.

Aramco expects capital expenditure to be at the lower end of the $25bn to $30bn range it has already indicated for this year.