200427 Iraq
An Iraqi family celebrates their daughter's birthday with a cake with figures of Dettol bottles and models of the coronavirus, during the outbreak of the coronavirus disease (COVID-19), at a cake shop in the holy city of Najaf, Iraq April 24, 2020. Image Credit: Reuters

Baghdad: Washington on Sunday granted Iraq a 30-day extension to a waiver allowing it to import Iranian gas for its dilapidated power grids despite American sanctions, an Iraqi official said.

The extension comes as Baghdad faces a cocktail of crises, including collapsing oil prices and the novel coronavirus pandemic and political deadlock over government formation.

Iraq relies on gas and electricity imports from its neighbour Tehran to supply about a third of its power grid, crippled by years of conflict and poor maintenance.

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The US blacklisted the Iranian energy sector in late 2018 and has granted Baghdad a series of waivers, usually for 45, 90 or 120 days.

Last month, Washington granted Iraq a 30-day extension — its shortest yet — and extended it again on Sunday.

“It is extended for another 30 days. There are no specific conditions,” the Iraqi official told AFP.

Iraqi officials had expected the waiver would be extended long enough to allow new prime minister designate Mustafa Kadhimi to pull together a government.

The PM-designate is in talks with Iraq’s political parties to form his first cabinet, and has until May 9 to submit it to parliament for a vote of confidence.

Kadhimi had a strong showing of support from across Iraq’s political spectrum when he was nominated, but disputes over ministerial positions appear to have worn it down.

The US has pressured Iraq to use the waivers to become independent from Iranian energy, but progress has been slow.

OPEC’s second-biggest producer relies on crude exports to fund more than 90 percent of its state budget, but the crash to prices under $30 per barrel has seriously undermined the government’s fiscal position.

In a further blow, coronavirus has spread across the country, with more than 1,800 confirmed cases and 87 deaths announced by the health ministry.