Iraq’s Energy Crisis: Corruption, Dependency, Türkiye’s Growing Role

ERBIL (Kurdistan24) – Iraq’s chronic energy crisis has once again come to the forefront as the country faces the grim possibility of struggling with severe electricity shortages, exacerbated by years of mismanagement, widespread corruption, and overreliance on external suppliers, particularly Iran.

Recent discussions between Iraqi and Turkish officials indicate a shift towards greater energy cooperation with Türkiye, as Baghdad attempts to diversify its energy sources and reduce dependency on Tehran.

A Legacy of Dysfunction and Corruption

Despite being one of the world’s largest oil producers, Iraq has remained dependent on imported energy to meet its domestic electricity needs.

The country has spent over $60 billion on the electricity sector since 2003, yet it continues to suffer from rolling blackouts, particularly during the scorching summer months. Years of mismanagement, a lack of proper investment in infrastructure, and rampant corruption have left Iraq unable to develop a self-sufficient energy grid.

Successive governments have funneled billions into energy projects that have either failed to materialize or been plagued by inefficiencies.

A major contributor to Iraq’s energy woes has been its dependence on Iran for gas and electricity. Currently, Baghdad imports around 50 million cubic meters of gas per day from Iran, costing Iraq between $4-5 billion annually.

These imports account for roughly a third of Iraq’s electricity generation. However, frequent disruptions in Iranian supply—whether due to unpaid debts, political disputes, or technical issues—have led to repeated power shortages, leaving millions of Iraqis without electricity.

US Sanctions on Iran: A Wake-Up Call for Baghdad

Iraq has launched an urgent search for alternative gas suppliers, turning to Qatar and the Sultanate of Oman, as it faces the imminent threat of an Iranian gas cut-off. This strategic shift comes in response to a decision by the United States to terminate a key waiver that allowed Baghdad to continue purchasing Iranian gas for electricity production, escalating pressure on the Iraqi government to diversify its energy sources.

Hamza Abdul-Baqi, director general of Iraq’s South Gas Company, confirmed to Reuters that the government has directed the Ministry of Oil to explore new suppliers. "This measure was taken due to the potential cut-off of Iranian gas. The government has tasked the Ministry of Oil with finding alternatives," Abdul-Baqi stated.

Iraq has been a major buyer of Iranian gas, importing approximately 50 million cubic meters daily under previous agreements. The sudden loss of this supply would significantly impact Iraq’s energy sector, which relies heavily on imported gas for electricity generation.

The latest development follows the decision by U.S. President Donald Trump’s administration to revoke the waiver that previously allowed Iraq to continue importing Iranian gas despite sanctions. Washington has been pressuring Iraq for years to reduce its reliance on Iranian energy, citing its broader "maximum pressure" policy against Tehran.

The policy aims to economically isolate Iran by cutting off its revenue sources, including gas exports. By revoking the waiver, the U.S. has intensified its efforts to sever Iraq’s energy ties with Iran, leaving Baghdad scrambling for new options.

Qatar and Oman have emerged as potential alternatives for Iraqi gas imports. Qatar, a global leader in liquefied natural gas (LNG) exports, has long been viewed as a viable supplier, offering a more stable and politically neutral energy partner. Oman, another Gulf nation with a growing natural gas sector, is also being considered as part of Iraq’s diversification strategy. While both countries have the capacity to supply Iraq with gas, logistical and financial challenges remain, particularly in terms of infrastructure adjustments and long-term contract negotiations.

For Iraq, the stakes are high. The country has faced repeated power shortages and blackouts, particularly during the sweltering summer months when electricity demand surges. Any disruption in gas supply risks further exacerbating these issues, fueling public discontent and placing additional strain on the government. In recent years, protests over poor electricity services have erupted across Iraq, highlighting the urgency of securing a reliable energy supply.

The move to seek alternative gas suppliers is also seen as a balancing act in Iraq’s broader geopolitical strategy. While Iraq has maintained strong economic and political ties with Iran, it has also sought to strengthen its relationships with Gulf states and Western allies. By diversifying its energy sources, Baghdad may be looking to ease tensions with Washington while securing stable gas supplies for its energy sector.

Despite these efforts, challenges remain. Developing new gas import routes, establishing infrastructure for LNG shipments, and negotiating favorable terms with new suppliers will require time and significant investment. Iraq’s energy transition will not happen overnight, and in the interim, the government will have to navigate the risks associated with potential supply disruptions from Iran.

Türkiye Steps In: New Agreements on Energy Cooperation

Amidst Iraq’s search for alternatives, Türkiye has emerged as a key partner in efforts to stabilize the country’s energy sector. On March 16, 2025, Turkish Energy and Natural Resources Minister Alparslan Bayraktar visited Baghdad and Erbil to discuss expanding cooperation.

According to reports from Daily Sabah and The Arab Weekly, Türkiye has agreed to double its electricity exports to Iraq, increasing supply to 600 megawatts. This agreement comes at a critical time, as Iraq attempts to offset its lost imports from Iran.

The agreement between Ankara and Baghdad also includes plans to integrate electricity grids, allowing for a more stable energy supply.

Additionally, discussions are ongoing regarding the importation of Turkish natural gas to supply power plants across Iraq, further reducing the country’s reliance on Iranian energy.

According to statements from Iraqi Foreign Minister Fuad Hussein, these agreements signify a major step in Iraq’s long-overdue diversification efforts.

Kurdistan Region and Mosul to Benefit

The energy agreements between Türkiye and Iraq also extend to the Kurdistan Region and Mosul.

According to a statement by the Kurdistan Regional Government (KRG), Turkish electricity exports will ensure a steady power supply to these areas, which have historically suffered from neglect and insufficient energy resources.

Prime Minister Masrour Barzani met with Minister Bayraktar in Erbil to discuss further cooperation, including the resumption of oil exports through Türkiye’s Ceyhan Port. The halt of these exports has dealt a severe economic blow to the Kurdistan Region, but the recent talks signal potential progress in resolving the issue.​

In parallel, the KRG has launched the ambitious Runaki Project to provide 24-hour electricity across the Kurdistan Region. Initiated by Prime Minister Masrour Barzani in October 2024, the project aims to modernize the electricity infrastructure and reduce reliance on private generators.

The Runaki Project has already been successfully implemented in several neighborhoods of Erbil, benefiting approximately 77,500 subscribers and impacting around 265,000 citizens.

The initiative has also expanded to Sulaimani, initially benefiting over 9,000 subscribers during a trial phase, and is now being rolled out in Duhok, with plans to ensure 24-hour electricity to all residents by the end of this year.

The KRG plans to extend the project across the entire Kurdistan Region by 2026, aiming to enhance the quality of life for residents and promote economic growth.

Challenges Remain: Can Iraq Overcome Its Energy Dependency?

While Türkiye’s growing role in Iraq’s energy sector presents a promising shift, serious challenges remain. Iraq’s energy infrastructure remains outdated, requiring substantial investment and modernization.

The country’s endemic corruption and bureaucratic inefficiencies also threaten to derail any meaningful progress. Furthermore, while Iraq is looking towards Türkiye and Gulf nations for alternative energy sources, it still faces geopolitical risks, particularly from Iranian-backed factions that may resist Baghdad’s move away from Tehran’s energy influence.

Nevertheless, the latest agreements with Türkiye highlight a potential turning point in Iraq’s energy policy. If successfully implemented, these initiatives could pave the way for Iraq to reduce its dependency on Iranian imports, improve energy security, and ultimately provide a more stable power supply for its citizens.

For Iraq, the challenge now lies in translating these diplomatic commitments into concrete action—ensuring that energy investments lead to real improvements, rather than disappearing into the same cycle of inefficiency and corruption that has plagued the country for decades.