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Iraq's Gas Deal Through Iran Blocked by U.S.
By Tsvetana Paraskova - Sep 19, 2025, 7:00 AM CDTAs a result, Iraq is now actively seeking alternative solutions for its gas supply, including negotiations for floating regasification terminals to import liquefied natural gas.Iraq’s hopes to boost its natural gas supply and end crippling power shortages have been dashed as an Iraqi plan to import gas from Turkmenistan via pipeline through Iran has failed to secure approval from the United States.
Iraq has sought U.S. approval to import Turkmenistan’s gas via Iran, but an approval never came, Iraqi officials told Reuters. The newswire has also reviewed draft contracts for the swap deal under which Iran gets no money but can retain up to 23% of the gas volumes from Turkmenistan that are en route to Iraq.
After months of engaging with the Trump Administration, Iraq has failed to secure a waiver from the U.S. which has launched a “maximum pressure” campaign against Iran.
“Proceeding (with the Turkmen deal) could trigger sanctions on Iraqi banks and financial institutions, so the contract is currently suspended,” Adel Karim, adviser to Iraq's prime minister for electricity affairs, told Reuters.
The failure of this plan means that Iraq now has to seek alternatives.
Despite being rich in oil and gas, Iraq has had to import gas from neighboring countries, including Iran, for fuel at its power plants.
Iraq lacks the gas processing plants necessary to process the associated gas extracted from its massive oilfields and continues to flare some of those gas volumes.
