Sep 21, 2018

Without waivers, U.S. sanctions on Iran will cripple Iraq

Iraqis attend a protest on August 24, 2018, in the southern city of Basra, which has suffered power outages. Photo: Haidar Mohammed Ali/AFP via Getty Images

Iraqi officials, struggling to form a new government months after May parliamentary elections, now have an even more pressing concern: persuading the Trump administration to waive sanctions that could deprive Iraq of 40% of its electricity. Due to go into effect November 5, the sanctions will exclude from the U.S. market foreign companies that buy Iranian oil, natural gas and petrochemicals. Bound by a “take-or-pay” contract with Iran, Iraq must pay $3 million a year for Iranian natural gas regardless of whether it's received.

Why it matters: For Iraq, which did $12 billion in trade with Iran last year, the impact would be particularly dire. In addition to losing natural gas supplies that account for 6,000 megawatts of electricity, Iraq could face potentially huge penalties if its neighbor takes it to arbitration for violating this contract. Just a month ago, the second-largest city in Iraq, Basra, exploded in riots in part because of electrical blackouts. Just imagine how much violence and disruption could occur if those blackouts were nationwide.

In addition to a natural gas waiver, Iraq is seeking an exemption to continue importing spare auto parts for the operators of 70,000 Iranian-produced taxis, as well as for ordinary drivers who own an additional 200,000 cars of Iranian origin. Meanwhile, Baghdad wants to preserve the lucrative religious tourism that brought more than 2.5 million Iranians to the pilgrimage cities of Najaf and Karbala last year, an industry that could also be threatened by the sanctions. Last but not least, Iraq would need to find a way to carry out financial transactions with Iran that bypass the U.S. dollar and other Western currencies.

It remains uncertain whether the Trump administration will grant Iraq waivers to shore up the stability of a country that has seen precious little for decades, and which has just beaten back a devastatingly destructive Islamic State insurgency.

What to watch: Trump's decision might rest on whether Iraq chooses a prime minister acceptable to Washington — such as the current one, Haider al-Abadi — or someone who is considered too close to Tehran. If the former, the Trump administration might be willing to give Iraq more time to wind down its business with Iran and acquire the infrastructure needed to use its own natural gas for electricity.

Barbara Slavin directs the Future of Iran Initiative at the Atlantic Council.

Go deeper

U.S. coronavirus updates: Infections number tops 140,000

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Andrew Witherspoon/Axios

The novel coronavirus has now infected over 142,000 people in the U.S. — more than any other country in the world, per Johns Hopkins data.

The big picture: COVID-19 had killed over 2,400 people in the U.S. by Sunday night. That's far fewer than in Italy, where over 10,000 people have died — accounting for a third of the global death toll. The number of people who've recovered from the virus in the U.S. exceeded 2,600 Sunday evening.

Go deeperArrowUpdated 6 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 721,584 — Total deaths: 33,958 — Total recoveries: 149,122.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 9 p.m. ET: 142,106 — Total deaths: 2,479 — Total recoveries: 2,686.
  3. Federal government latest: President Trump says his administration will extend its "15 Days to Slow the Spread" guidelines until April 30.
  4. Public health updates: Fauci says 100,000 to 200,000 Americans could die from virus.
  5. State updates: Louisiana governor says state is on track to exceed ventilator capacity by end of this week — Cuomo says Trump's mandatory quarantine comments "panicked" some people into fleeing New York
  6. World updates: Italy on Sunday reports 756 new deaths, bringing its total 10,779. Spain reports almost 840 dead, another new daily record that bring its total to over 6,500.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

World coronavirus updates: Cases surge past 720,000

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

There are now more than 720,000 confirmed cases of the coronavirus around the world, according to data from Johns Hopkins. The virus has now killed more than 33,000 people — with Italy alone reporting over 10,000 deaths.

The big picture: Governments around the world have stepped up public health and economic measures to stop the spread of the virus and soften the financial impact. In the U.S., now the site of the largest outbreak in the world, President Trump said Sunday that his administration will extend its "15 Days to Slow the Spread" guidelines until April 30.

Go deeperArrowUpdated 1 hour ago - Health