Iran Lowers Gas Exports to Iraq, Cutting Power Supplies

A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. REUTERS/Essam Al-Sudani/File Photo
A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. REUTERS/Essam Al-Sudani/File Photo
TT

Iran Lowers Gas Exports to Iraq, Cutting Power Supplies

A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. REUTERS/Essam Al-Sudani/File Photo
A worker walks at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015. REUTERS/Essam Al-Sudani/File Photo

Iraqis living in Baghdad and Central Euphrates governorates are braving this year’s winter weather without the ability to turn on much needed electric heaters due to low supplies of electricity, which is sometimes made available for a mere five hours a day.

The Levantine country’s Electricity Ministry has attributed the extended power cuts to Iran halting its gas exports to Iraq, which are vital for running some of Iraq’s power stations. It said that the freeze in exports comes as a result of Baghdad falling short on debt payments to Tehran.

It is worth noting that the energy committee at parliament called for replacing senior officials in the Electricity Ministry to avoid a possible system collapse.

“The sharp decline in power production is the result of Tehran stopping its supply of gas to Iraq,” Electricity Ministry Spokesman Ahmed al-Abadi told Asharq Al-Awsat, adding that Iraq was late on paying its dues to Iran.

“Iran used to supply Iraq with about 50 million cubic meters per day, but today only about 5 million cubic meters are being delivered. This caused a significant drop in electricity generation,”al-Abadi explained.

“We have previously warned that the electricity issue could bring down any government if it is not handled properly. The government today has the option of negotiating with the Iranian side over the outstanding debts, and there is also the option to instruct the Ministry of Oil to replace gas with liquid fuel,” he added.

The spokesman, however, ruled out the latter option due to Iraq requiring 23,000 cubic meters of liquid fuel per day to run its power stations, which is out of the country’s production capacity.

Iraq’s only remaining option, according to al-Abadi, is for the government to buy more time from Iran.

Iran’s energy minister is expected to visit Baghdad next Tuesday. Iraqi officials will likely seek convincing him to extend the deadline on payments.



Trump Taps Scott Bessent for Treasury

(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)
(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)
TT

Trump Taps Scott Bessent for Treasury

(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)
(FILES) Scott Bessent, head of Key Square Group and former chief investment officer of Soros Fund Management, attends the second day of the annual Allen & Company Sun Valley Conference, July 12, 2017 in Sun Valley, Idaho.(Photo by Drew ANGERER / GETTY IMAGES NORTH AMERICA / AFP)

President-elect Donald Trump on Friday said he will nominate prominent investor Scott Bessent as US Treasury secretary, a key cabinet position with vast influence over economic, regulatory and international affairs.

"I am most pleased to nominate Scott Bessent to serve as the 79th Secretary of the Treasury of the United States," Trump said in a statement released on Truth Social. "Scott is widely respected as one of the world's foremost international investors and geopolitical and economic strategists."

Wall Street has been closely watching who Trump will pick, especially given his plans to remake global trade through tariffs and extend and potentially expand the raft of tax cuts enacted during his first term, Reuters reported
The choice came after days of deliberations by Trump as he sorted through a shifting list of candidates. Bessent spent day after day at Trump's Mar-a-Lago home in Florida providing economic advice, sources said, a proximity to the president-elect that may have helped him prevail.
Other names that had been floated included Apollo Global Management Chief Executive Marc Rowan and former Federal Reserve Governor Kevin Warsh. Investor John Paulson had also been a leading candidate, but dropped out, while Wall Street veteran Howard Lutnick, another contender, was appointed as head of the Commerce Department.
Bessent, who did not immediately respond to a request for comment, has advocated for tax reform and deregulation, particularly to spur more bank lending and energy production, as noted in a recent opinion piece he wrote for The Wall Street Journal.
The market's surge after Trump's election victory, he wrote, signaled investor expectations of "higher growth, lower volatility and inflation, and a revitalized economy for all Americans."
"Bessent has been on the side of less aggressive tariffs," said Oxford Economics' Ryan Sweet, adding that picking him makes the steep tariffs Trump proposed on the campaign trail less likely.
Bessent follows other financial luminaries who have taken the job, including former Goldman Sachs executives Robert Rubin, Hank Paulson and Steven Mnuchin, Trump's first Treasury chief. Janet Yellen, the current secretary and first woman in the job, previously chaired the Federal Reserve and White House Council of Economic Advisers.
Republican US Senator Lindsey Graham from South Carolina, Bessent's home state, said in a statement: "President Trump's economic agenda is in good hands with Scott Bessent. I look forward to working closely with Scott and President Trump to lower inflation and create the golden age of prosperity for the American people."