Tehran Receives $1.6 Bln in Gas Debt from Iraq

Iran announced on Thursday that it has received $1.6 billion from Iraq to settle a portion of the obligations it had sought from Iraq for gas supplies since 2020.

"In light of aggressive energy diplomacy and months of discussions, $1.6 billion in arrears... for gas supplies to Iraq has been received," Iranian Oil Minister Javad Owji tweeted, according to the Tasnim news agency.

"The country's gas export volume has climbed by 25% since the beginning of the year, compared to 2021, and income collection has also increased by 90%," Owji noted. On March 21, the Iranian new year began.

Ahmed Moussa, a spokesman for Iraq's Electricity Ministry, said the government has begun repaying its debts for gas imports from Iran by borrowing from the Trade Bank of Iraq, and that the money has been put in the Credit Fund by the Ministry of Finance.

"We're still relying on the Emergency Support Law to pay our debts," Moussa told Tasnim. Baghdad was supposed to pay Tehran the sum by the end of June.

The loan is due in 2020, but payment has been delayed due to US sanctions against Iran. Majid Chegeni, Iran's deputy oil minister, announced last month that the country had reached an arrangement with Iraq to pay $1.6 billion in arrears by the end of May.

Iraq is still reliant on imports to meet its energy demands, despite its vast oil and gas reserves. Iran supplies a third of Iraq's gas and electrical needs, but supplies are frequently curtailed or decreased, exacerbating daily load shedding problems.

Separately, the Iranian state news agency IRNA said on Thursday that Iranian authorities had detained a vessel in the Gulf waters around Kish Island carrying 90,000 litres of illicit petroleum.

Criminal warrants were obtained for the captain and five other crew members, and they have been detained, according to IRNA.

Iran has been fighting extensive petroleum smuggling by land and sea to neighbouring states, despite having some of the world's cheapest fuel prices due to heavy subsidies and the depreciation of its currency.