Washington Allows Iraq to Pay for Iranian Gas through 3rd Party

People fish at the Shatt al-Arab stream in the city of Basra, southern Iraq. (AFP)
People fish at the Shatt al-Arab stream in the city of Basra, southern Iraq. (AFP)
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Washington Allows Iraq to Pay for Iranian Gas through 3rd Party

People fish at the Shatt al-Arab stream in the city of Basra, southern Iraq. (AFP)
People fish at the Shatt al-Arab stream in the city of Basra, southern Iraq. (AFP)

The United States on Tuesday moved to let Iraq pay Iran for electricity via non-Iraqi banks, a US official said, a step Washington hopes may keep Tehran from forcing unpopular power cuts during the Iraqi summer, according to Reuters.

Secretary of State Antony Blinken signed a 120-day national security waiver allowing Iraq - heavily dependent on Iranian electricity - to deposit such payments into non-Iraqi banks in third countries instead of into restricted accounts in Iraq, said the official who spoke on condition of anonymity.

The US had granted previous governments since the government of Haider al-Abadi a period of 120 days to pay for its purchases from Iran, including gas, in US dollars. While Iraq continues to heavily depend on imported Iranian gas, Washington permitted Iraq to pay the Iranian debts under the governments of Adel Abdul Mahdi and Mustafa al-Kadhimi.

The summer temperature and the Iranian and American procedures have worsened the condition in Iraq. Iran halted its gas supply to Iraq in the peak of heat, meanwhile, Iraqis complained about the dual US-Iranian sanction on Iraq.

Iran had halted its gas supply to Iraq because the latter didn’t pay its debts. When Iraqi Prime Minister Mohammed Shia al-Sudani announced the oil in return for the gas policy, Iran resumed gas supply that was halted for technical and not financial reasons, according to an Iranian official.

The US decision serves the interest of Iraq and Iran as well. No official approval was announced but experts and observers said that the US is likely to provide new support to the government of Sudani.

In this context, a professor of Mass Communication at the Iraqi University, Dr. Fadel Al Badrani, said Sudani has probably taken US approval before trading oil for Iranian gas to maintain electricity.

It is a temporary step to avoid a crisis, proving the US support to the government of Sudani, according to Badrani.

He added that the US exemption to Iraq for 120 days represents the support to Baghdad to overcome the electricity crisis during summer, but the condition to transfer funds to non-Iraqi banks proves that Washington sticks to its firm stance toward Tehran.

Iraqi Electricity Minister Ziad Ali Fadel confirmed on Wednesday that the ministry has not received any official directive on allowing Iraq to pay dues for Iranian gas.

"The issue of the United States allowing Iraq to pay dues for Iranian gas for 120 days was published in the media only and we have not received anything official," Fadel told the Iraqi News Agency (INA).

"There are reserved amounts belonging to the Iranian side and they are paid either with money or through oil," he added.

"If the United States gives consent to the payment of dues, it is possible to spend part of it money and the other part fuel," the minister said.



Where Do the Israel-Hamas Ceasefire Talks Stand?

Palestinians carry bodies of relatives killed in Israeli strike in Khan Younis on Tuesday. (AP)
Palestinians carry bodies of relatives killed in Israeli strike in Khan Younis on Tuesday. (AP)
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Where Do the Israel-Hamas Ceasefire Talks Stand?

Palestinians carry bodies of relatives killed in Israeli strike in Khan Younis on Tuesday. (AP)
Palestinians carry bodies of relatives killed in Israeli strike in Khan Younis on Tuesday. (AP)

Israeli media has intensified coverage of a potential breakthrough in negotiations with Hamas aimed at securing a temporary ceasefire in the Gaza Strip, which could pave the way for more serious talks on a permanent truce, according to both Israeli officials and sources within the Palestinian group.

Hamas sources confirmed to Asharq Al-Awsat that indirect negotiations are still underway, although no tangible progress has been achieved so far.

They described the process as “ongoing but fluctuating,” citing shifts in momentum due to regional distractions, including the Iranian-Israeli conflict, and the mediators’ engagement with other files they deem more pressing.

On Sunday, Israeli Prime Minister Benjamin Netanyahu hinted at possible progress, saying he might dispatch a delegation to resume negotiations and had instructed officials to push forward with talks.

Senior Hamas officials inside and outside Gaza said there have been moments of increased activity in the talks, but no major breakthrough has occurred. However, they acknowledged some progress based on “positive signals” conveyed by mediators regarding a proposal recently advanced by US envoy Steve Witkoff.

The US plan reportedly includes a 60-day ceasefire period during which Israeli hostages held by Hamas would be released in stages.

According to Hamas sources, mediators have assured the group that such a phased release would ensure Israel’s commitment to the ceasefire throughout the full duration of the truce.

Sources have not ruled out the possibility of a “serious breakthrough” in ceasefire negotiations in the coming days, but warned that any progress ultimately depends on Israel’s stance.

“The main obstacle is not just ensuring a 60-day ceasefire,” one Hamas official told Asharq Al-Awsat.

“The real issue is securing clear guarantees that serious negotiations will follow that could lead to a comprehensive agreement to end the war. Israel continues to stall on this point, and that could once again derail the entire process,” they added.

The official dismissed recent Israeli media reports claiming “significant progress” had been made, calling them “nothing but political maneuvering.”

“Everything depends on Israel,” the source told Asharq Al-Awsat. “But so far, the Netanyahu government has failed to offer any clear commitments to ending the war. What’s being circulated in the Israeli media is just part of Israel’s ongoing evasive tactics.”

Hamas sources said mediators had offered reassurances regarding the implementation of a humanitarian protocol and steps to alleviate Gaza’s worsening humanitarian crisis - issues the group says must be addressed alongside any ceasefire arrangement.

Israeli daily Yedioth Ahronoth reported Tuesday that unnamed regional sources have pointed to “very significant progress” in negotiations toward a potential hostage deal, which could include a ceasefire and steps to end the war in Gaza.

“The two sides have shown flexibility, but both are wary of the consequences of confronting Iran,” one source was quoted as saying. The report added that the Israeli delegation has yet to travel to Doha out of concern that doing so could slow, rather than accelerate, the pace of negotiations.

According to the newspaper, US officials recently told the families of Israeli hostages that there are “extremely positive signs” of a potential breakthrough.

However, an unnamed Israeli official cautioned that the talks cover far more than just the initial stage of releasing eight to ten living captives. “The issues at hand are much broader and relate to effectively ending the war,” the official said.

Families of the Israeli hostages have been urging the government to prioritize their release and to seize the opportunity presented by the situation with Iran to push for a resolution.