The US State Department welcomed Iraqi Prime Minister Mohammed Shia al-Sudani's commitment to respecting sanctions imposed on Iran.
Iraq will end on Saturday gas imports from Iran in line with conditions imposed by US President Donald Trump's administration.
The government will now be faced with the task of finding alternative sources of gas that is needed to fuel power plants. Experts are predicting a very difficult summer as temperatures soar and with little power to relieve the heat.
Iraq used to import 50 million cubic meters of gas from Iran per day to fuel its power plants.
"We have nothing to announce with regard to the current electricity waiver that expires on the (March) eighth...We are reviewing all existing sanctions waivers that provide Iran any degree of economic or financial relief," State Department spokesperson Tammy Bruce said on Thursday.
"We are urging the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible, and welcome the Iraqi Prime Minister's commitment to achieve energy independence."
The US is reviewing all existing sanctions waivers that provide Iran any degree of economic relief, and urging the Iraqi government to eliminate its dependence on Iranian sources of energy as soon as possible, Bruce said.
The US is using the waiver review in part to increase pressure on Baghdad to allow Kurdish crude oil exports via Türkiye, according to two sources familiar with the matter, reported Reuters.
Iraq's negotiations with the semi-autonomous Kurdish region over the oil export resumption have been fraught so far.
The US government has said it wants to isolate Iran from the global economy and eliminate its oil export revenues in order to slow Iran's development of a nuclear weapon.
Trump's restoration of the "maximum pressure" campaign on Iran was one of his first acts after returning to office in late January.
Alternatives
Finding alternatives for Iranian gas appears to be bleak so far. Member of the oil and gas parliamentary committee Ali Saadoun al-Lamy admitted that Iraq does not have alternatives at the moment.
Several power plants rely primarily on gas from Iran, he told the media. Cutting the supply or abandoning it suddenly will lead to a drop in electricity generation in Baghdad and other regions.
Turning to local gas will take two or more years to achieve, while importing gas and electricity from other countries besides Iran may take a month or more, he explained.
Iraq produces 27,000 megawatts of electricity. The majority of its power plants run on gas and production occasionally drops to 17,000 megawatts.
The figures are below its demand for 40,000 megawatts to meet demand.
Speculation is rife in Iraq about the new US administration's policy towards the country and the possibility that sanctions on Iran will impact it as Baghdad gears up for parliamentary elections this year.
Political sources told Asharq Al-Awsat that the coming months will witness a "settling of political scores" as American pressure mounts on Iran-aligned forces in the country.
