Iraqi resource dependence and Trump’s Iran policy: a circle that can’t be squared?

With many of U.S. President Donald Trump’s appearances on the media dominated by the subject, those who have not encountered his frequent lambasting of the Iran nuclear deal are likely as few in number as they are, albeit depending on both viewpoint and aversion to repetition, perhaps fortunate.

There can be then little doubt that even those less politically engaged likely have some awareness of the centrality of the issue to Trump’s agenda and specifically the latter’s disapproval of the deal, to perhaps put it mildly. What is possibly less known however is the plethora of problems this position is causing for the country that once topped the USA’s foreign policy agenda, Iraq.

To give some background, the Iran Deal, or ‘Joint Comprehensive Plan of Action’, was agreed between Iran and the five permanent members of the UN security Council, with a sixth ad-hoc addition in the form of Germany (P5+1), and provided phased relief from international sanctions that were imposed as Iran’s nuclear programme became progressively developed and unilateral from the 1979 Iranian revolution onwards.

Heralded by the Obama administration as the solution to curtailing Iranian nuclear aspirations that have, since the programme’s inception in 1957, occasionally drifted into being more military in nature, President Trump has ceased U.S. observance, citing the deal’s supposed inability to ‘constrain Iran’s ambitions’.

Image Courtesy of The White House via The White House © 2017, public domain

Whether for this reason or whether part of a desire to dismantle Obama’s legacy, as suggested by some commentators, the result has been the U.S. Treasury Department’s re-imposition of a range of sanctions including those relating to the financial sector, insurance, aircraft parts, as well as, most importantly in this context, the foreign purchase of natural resources such as hydrocarbons.

In terms of how this is playing out in Iraq, the country of course shares its longest border with Iran, which certainly adds a regional angle to new Iraqi President Barham Salih’s emphasis on the importance of  ‘good and stable relations’ and there are strong economic ties in place, but perhaps most pressing is the issue of the country’s resource dependence.

The crux of the problem lies in the fact that Iraq only fulfils 70 percent of its electricity generation, with the shortfall being largely met by gas imports from Iran now exceeding 14 million cubic meters annually. Indeed, Iraq’s Minister of Electricity Qassem al-Fahdawi, who has been in the position since 2014, spoke just last year of the country’s sustained need for Iranian gas for at least another seven years.

Thus, in the context of the Iraqi government’s struggles to manage the fallout from natural disasters, conflict, and the often-related perception of being dogged by incompetence and corruption, it is pushing the US to ensure that the new sanctions will not disrupt the vital fuel imports that could be the difference between relative stability and the kind of popular discontent observed across the Basra Governate last summer that was triggered by water shortages and sanitation issues.

Whilst in the long-term the Iraqi government hopes to develop the capability to fully process its own reportedly plentiful gas reserves, the ad-hoc mitigation of the dilemma foregrounds this short and medium-term incompatibility of the two sets of priorities.

As well as being clearly makeshift, the 45-day sanctions waiver granted by the U.S. last month to allow Iraq to continue purchasing Iranian natural gas, has been quickly met by concerns including from one anonymous government source who emphasised that the ‘time granted is not enough’ to avert potential crisis.

However, commentators including former Pentagon official Michael Rubin and former State Department lead sanctions expert Richard Nephew do believe that the US is very likely to continue granting these waivers; providing potentially crucial flexibility for a country in which it has invested so much, but certainly at the cost of showcasing the flaws of the policy, some might say.

Whilst there can be little doubt of the potential threat posed by Iran past and present, the US must be cautious if it is to ensure that, in the context of an Iraqi inability to access Iranian energy as a result of US sanctions, a medium-term resource shortage does not push a disillusioned Iraq into Iran’s sphere of influence; thereby hindering the USA’s longer-term strategic objective of limiting Iranian sway in a country with which it shares a Shi’a majority population.

 

 

Banner Image: Image Courtesy of U.S. Department of State via Wikimedia Images © 2013, public domain

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