Oil, gas and Iran economic analyst
US and Iraqi companies have signed two deals, seemingly aiming to make the country independent from Iranian gas and electricity imports that provide billions of dollars to Tehran.
The deals are meant to capture Iraqi associated gas from oilfields, currently being flared due to lack of gas collecting equipment.
The US State Department released a joint statement after sealing the deal with Iraq, saying that the US has the potential to harness immense natural gas resources, invest in new energy infrastructure and renewables, and achieve energy self-sufficiency by 2030.
“The United States commended Iraq for its progress on gas capture and work on commercializing associated gasses,” the statement read.
Currently Iraq flares about 18 billion cubic meters (bcm/yr) of associated gas, ranking the second globally after Russia.
This amount of gas waste is two times more than Iraq’s annual gas imports from Iran.
Since the United States imposed banking sanctions on Iran in 2018, Iraq was not able to make cash payments to Iran, leading to the accumulation of around $11 billion in unpaid bills. The Biden administration, however, offered waivers to Iraq starting in June 2023 and the debt was paid in Oman, from where Iran is supposed to spend the money for buying "unsanctionable" goods.
However, critics have slammed the Biden administration for this decision, arguing that money is fungible and any hard currency Iran is able to access means that it can spend other currency resources on its military and other destabilizing activities.
Iraq's electrical grid has for years been dependent on gas imports from Iran to run its power generation plants. Iraq loses 4,000 to 5,000 MW of its electricity generation in some months, especially in winter and summer, due to halting Iranian gas and electricity deliveries to this country. Iran’s gas shortage soars to 250-300 mcm/d in winters and faces a 14,000 MW electricity shortage in summers, forcing it to reduce supplies to Iraq.
The country needs 40,000 MW of electricity, but its current generation capacity stands at 27,000 MW, of which 30% uses Iranian gas.
Iraq has projected to stop gas flaring by 2028 and reach energy self-sufficiency by 2030. It is working to reduce its heavy reliance on Iranian energy supply, which is subject to sanctions, requiring the US to issue waivers every four months.
Though Iraq recently extended a gas import deal with Iran for next five years, it has been trying to diversify energy import sources, including Turkmen gas import through Iran.
The joint statement says that US commended Iraq for its considerable work on increasing regional connectivity, particularly in energy interconnections with Jordan, Saudi Arabia, and countries of the Gulf Cooperation Council: “After years of work to build its interconnection with Jordan, Iraq is receiving 40 megawatts of electricity for the Iraqi people; future phases would increase capacity to 900 megawatts”.
Iraq’s gas and power deals
The agreements, signed in Washington in the presence of Iraqi Prime Minister Mohammed Shia al-Sudani and US officials, aims to capture above 3 bcm/yr of associated gas at the Bin Umar oilfield.
The memorandums of understanding signed between US companies including KBR, Baker Hughes and GE.N. as well as local Halfaya Gas Company, with Iraq's South Gas Company to capture flaring gas at Umar oilfield and construct a 400 km pipeline to transit the gas to processing facilities.
Iraq's oil ministry announced last month that it would work with Siemens Energy and SLB, formerly known as Schlumberger, to process associated gas.
Geoffrey Pyatt, assistant secretary for energy resources at the US State Department said the projects would be developed over the next couple of years.
Iraq had several deals with Western companies to capture associated gas, signed in the late 2010s. It could increase gas production by 30% between 2012-2017, but the growth stalled then due to plunging oil prices and government’s revenues.
State-run IRNA news reported the "activation of anti-aircrafts'' in Esfahan's 8th Shekhari Air Base Base while downplaying the situation as "normal." Meanwhile, flightradar24.com showed that for hours after the incident, Iranian air traffic was lower than usual.
Iranian officials have not officially confirmed the attack was carried out by the Israelis and merely said Esfahan's air defenses have targeted several “micro-birds and suspicious objects”.
US officials confirmed to ABC News that three missiles were fired from Israeli fighter aircraft outside of Iran. "The Israelis were targeting an air defense radar site near Esfahan that’s part of the protection of the Natanz nuclear facility," an official said. "The first assessment is that the strike took out the site, but assessment hasn’t been completed," the official said.
A report in the New York Times quoted two Israeli and three Iranian officials who said the Israeli army had launched an attack on Iranian targets. The NYT further reported that Iranian officials confirmed to them that a strike had hit a military air base near Esfahan.
Bloomberg wrote that Israelis had notified US officials before the attack.
The Italian foreign minister stated that the US informed the G7 foreign ministers that it had received "last-minute" information from Israel about an upcoming operation in Iran.
US Secretary of State Antony Blinken declined to comment on the overnight attack in Iran, stating that Washington does not participate in any offensive operations.
Around the same time as the incident in Iran, Syria's SANA news agency reported Israel had fired missiles at an air defense unit in the country’s south, which is directly west of Esfahan, some 1,500 kilometers away. Syria's Observatory for Human Rights reports that the strike targeted a military radar used by the government.
With Iranian state media confirming that the antimissile system was activated at Esfahan's 8th Shekari Air Base, and US media confirming its significance as a major air base, attention is inevitably focused on that specific location.
It is one of the 17 active air bases of the Islamic Republic Army, known as the "heart of the country's air defense" due to its location in one of its most central parts. Iran's fleet of F-14 Tomcat aircraft—purchased before the 1979 Islamic Revolution—is headquartered at this base.
Farzin Nadimi, a Senior Fellow with The Washington Institute, told Iran International besides two military bases, Esfahan is home to the Shahed Aviation Industries Research Center, which manufactures the Shahed-136 drones.
Esfahan is also home to sites associated with Iran's nuclear program, such as its underground Natanz enrichment site, which Israeli sabotage activities have purportedly repeatedly targeted.
After the incident, state television described all the area's nuclear sites as "fully safe."
The United Nations' nuclear watchdog, the International Atomic Energy Agency, also stated there had been no damage to Iran's nuclear facilities.
Although there are no official reports of what type of weapons were used during the attack, experts have speculated what might have occurred.
Nadimi, who specializes in security and defense affairs, told Iran International that Israel would not use regular or laser bombs to carry out the attacks as they have done in the past. Since 2015, the Israeli military has possessed missiles with a range of 1,500 kilometers that can be launched from aircraft, which means they can be fired without entering the Esfahan anti-aircraft airspace.
According to the Jerusalem Post, long-range missiles were used in the attack to avoid Tehran's radar detection capabilities, debunking Iran's claims that "micro drones" were used.
It’s worth mentioning that Reuters quoted a senior Iranian official who said the attack might be by "infiltrators" rather than by Israel.
Iran launched over 350 projectiles on Saturday night following the alleged April 1 Israeli air strike on the Iranian consulate in Damascus in which two senior IRGC commanders were killed along with several others.
Some experts believe the relatively small scale of Friday's attack may be attributed to pressure exerted by the US and its allies, as well as the fact that Israel is engaged on other fronts with Hamas and Hezbollah.
An unnamed Israeli official told the Washington Post that the attack "was intended to signal to Iran that Israel had the ability to strike inside the country".
Some analysts have taken a different stance, comparing the aftermath of the attacks rather than how they were carried out.
Menashe Amir, a Middle East affairs analyst, told Iran International that the attacks are comparable: Iran intended to target the Nevatim Airbase, and Israel also attacked a military base in return. The difference is that Iran had to make extensive use of artillery while Israel did not have to, which shows the superiority of Israel's military power.
According to Amir, the attack fits the doctrine the Israeli military has always pursued: not to engage in war on several fronts.
Political analyst Hessam Dastpish told Iran International that both Iran and Israel achieved their respective objectives through the use of their respective methods of conflict. Iran created a massive scene to satisfy proxy groups, while Israel wanted the support of the US and allies, so under their pressure, it pursued a different strategy.