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Iran cuts gas flow to Iraq amid heavy arrears

Iraqi sources say Iran have significantly slashed its gas supply to the Arab country due to unpaid debt.

Iran has reportedly cut gas supplies to Iraq in a renewed attempt to force the Arab country to pay its debts for previous energy imports.

Iraq’s Minister of Electricity Ziad Ali Fadhil told the official INA news agency on Sunday that Baghdad had started intensive talks with Iran for a resumption of gas supplies that he said had been slashed by nearly a half because of unpaid debts.

Fadhil said reduced supplies of Iranian gas to Iraqi power plants had caused Iraq’s electricity production to drop by as much as 5 gigawatts (GW), forcing power outages in many towns and villages across the country amid temperatures that regularly reach 50 degrees Celsius (122 degrees Fahrenheit).

He said Iran had also cut electricity supplies to Iraq by 1 GW because of the arrears.

“We hope they (Iranians) would understand Iraq’s situation and the hot temperatures in the country and restore gas exports to previous levels,” said the minister.

The comments come days after Iranian authorities expressed hope that Iraq would soon provide Iran with an access to more than $10 billion worth of funds that have remained blocked in an account in the Trade bank of Iraq (TBI) because of US sanctions.

Iraqi and US authorities had indicated in statements last month that the Central Bank of Iran would be able to access the funds for paying for imports.

However, the TBI seems to have been unable to clear the account as Iraqi Ministry of Electricity sources said on Sunday that they had been notified by Iran that the reason for cutting gas flows was the failure to pay arrears.

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