Iraq denied US nod for Turkmen gas via Iran

Iraq's attempt to ease its chronic power shortage with gas from Turkmenistan routed through neighbouring Iran has failed under US pressure, leaving Baghdad scrambling for alternatives to keep the lights on.

Oil-rich Iraq has struggled to provide its citizens with power since the 2003 US-led invasion that toppled Saddam Hussein, forcing many to rely on expensive private generators, causing economic hardship and sparking social unrest.

A deal first proposed in 2023 would have seen Turkmenistan export gas to Iraq through Iran, which lies between the two countries. Under the swap deal, Iran would receive the gas and supply it to Iraq, but this risked violating US sanctions on Tehran — requiring Washington's approval.

That approval never came. US President Trump's administration has doubled down on a "maximum pressure" campaign against Tehran.

Reuters spoke to four Iraqi officials and reviewed seven official documents to reveal how Baghdad had sought Washington's approval for months to let it import roughly 5bcm of Turkmen gas via Iran.

Iraq sought to import 5.025bcm of Turkmen gas a year, facilitated via Iran's state-owned National Iranian Gas Company, according to a draft contract of the swap deal seen by Reuters.

Iran would receive no money but would get gas for its own needs amounting to no more than 23% of the overall daily volume coming from Turkmenistan, a document showed.

Baghdad also offered to allow a third-party international monitor to oversee the deal's compliance with US sanctions and anti-money laundering rules, the same document showed.

The US Treasury declined to comment but a US source familiar with the matter said the Trump administration would not approve arrangements that could benefit Iran, though it was working with Iraq on its energy needs.

The Iranian government, oil ministry, NIGC and Turkmen foreign ministry did not respond to Reuters requests for comment.