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Russia, Iraq face OPEC+ cuts, look to new deals

While Iraq's dependence on imported Iranian electricity continues to worry Washington, the key to breaking this energy dependence lies in the development of its own gas fields.
An employee turns a valve at the Nahr Bin Omar natural gas field, north of the southern Iraqi port of Basra on April 21, 2020. (Photo by Hussein FALEH / AFP) (Photo by HUSSEIN FALEH/AFP via Getty Images)

Iraq is one of the few countries to benefit from the Iranian sanctions’ exemptions. The United States has repeatedly extended the period of a sanctions waiver for Iraq — most recently in September — due to Baghdad's dependence on Iran’s gas and electricity. Iraq’s need to comply with the OPEC+ quotas has a negative impact on the situation, since with the cut of oil production in Iraq the volume of associated gas production also decreased. And this, in turn, again increases dependence on the gas imported from Iran.

If Baghdad loses the possibility to import electricity from Iran, Iraq will not be able to receive the same volume from another source. After Iraq's OPEC+ agreement partners expressed dissatisfaction with Baghdad’s failure to comply with the terms of the deal in May and June, Baghdad abided by the quotas in August, when the production amounted to 3.023 million barrels per day. Thus, Iraq was again forced to ask for so-called compensatory cuts, i.e., cutting production to compensate for overproduction in prior months.

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