Iran cuts gas flows to Iraq, threatens further reductions

Iran has slashed the amount of natural gas it exports to Iraq and threatened further cutbacks over unpaid bills, increasing the likelihood of more electricity shortages in Baghdad and other major cities.

Iraq has been receiving 5 million cubic meters a day since Iran cut its daily exports from 50 million cubic meters two weeks ago, Ahmed Moussa, a spokesman for Iraq’s electricity ministry, said in an interview.

The Iranian government told Iraq it will reduce its supplies to 3 million cubic meters a day starting Sunday, but has not yet implemented the move, he added.

Iran started cutting exports to its neighbor, which is OPEC’s second-biggest oil producer, after Iraq fell behind on its gas payments. Iraq owes around $2.7 billion in unpaid bills, Moussa said.

Iranian Energy Minister Reza Ardakanian will meet Iraqi officials in Baghdad on Tuesday to discuss the issue, the spokesman said.

Power production has dropped by around 7 gigawatts as a result of the gas supply curbs, Moussa said. Baghdad and other central locations have been hit hardest by electricity shortages.

While Iraq’s supply of Iranian gas has been disrupted, its electricity imports have continued as normal, he added.