Following US visit, Iraqi premier looks to implement $8 bil energy deals
Biden presidency may be more lenient towards Iranian energy imports
Iraq, OPEC’s second-largest oil producer, relies on Iran for gas and electricity
US President Donald Trump has been eager to support Kadhimi as he tries to rebuild the country after years of war amid a fractured political landscape. But Trump’s tough stance on Iran has threatened Iraq’s internal stability. This could change under Democratic Party opponent Joe Biden, who is thought to be more conciliatory towards Tehran.
Kadhimi has touted the deals worth around $8 billion, including with Chevron for upstream investment, as a critical step to invigorating the country’s oil and gas industry, which provides the bulk of Iraq’s revenues. Analysts warn these deals may prove to be little more than window dressing, as the announcements included few details, timelines or specifics.
The onus will be on Iraq to make itself a desirable investment destination as it weighs political ties with the US beyond November’s presidential race.
“The key factor will be whether Iraq begins to change its contractual terms at some point in the future to make them more attractive, and whether Baghdad sees political virtue in securing US investment in the country,” according to Raad Alkadiri, senior director at the BCG Center for Energy Impact. “Kadhimi’s recent visit to Washington suggests that the jury is still out on that question. A host of MOUs were signed in the energy sector, but they lacked substance; many were agreements to negotiate, rather than concluding deals.”
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