Iraq’s Plan To End Iranian Gas Reliance By 2028

Have you ever wondered what it takes for a nation to break free from decades of energy dependence? Iraq, a country long tethered to its neighbor Iran for roughly a third of its electricity needs, is charting a bold new course. Under mounting pressure from the United States and fueled by a vision for self-reliance, Iraqi Prime Minister Mohammed Shia al-Sudani recently announced an ambitious plan to end the nation’s $4-billion reliance on Iranian gas by early 2028. It’s a high-stakes move, one that blends geopolitics, economic strategy, and a dash of optimism. Let’s dive into what this means for Iraq, its people, and the global energy landscape.

A Bold Vision for Energy Independence

Iraq’s energy sector has been a paradox for years: a nation rich in oil and gas, yet plagued by chronic power shortages. The reliance on Iranian gas, which powers about a third of Iraq’s electricity grid, has been a lifeline but also a vulnerability. Years of underinvestment, mismanagement, and conflict have left the national grid creaking, forcing many Iraqis to lean on costly and polluting private generators. But change is in the air, and it’s coming with a deadline.

Prime Minister al-Sudani, in a recent interview, laid out a roadmap to transform Iraq’s energy landscape. By early 2028, he says, Iraq will eliminate its dependence on Iranian gas entirely. The plan hinges on capturing flared gas—the gas currently wasted during oil production—and channeling it into power generation. It’s a practical yet audacious goal, one that could reshape Iraq’s economy and its place on the global stage.

We have a clear vision to address this structural imbalance and provide reliable electricity to our citizens.

– Iraqi Prime Minister

The Strategy: Capturing Flared Gas

At the heart of Iraq’s plan is a push to stop gas flaring, the practice of burning off excess gas during oil extraction. This isn’t just an environmental win—it’s a game-changer for energy production. Iraq has already inked deals with major international players, including France’s TotalEnergies, as well as companies from China and the UAE, to capture and process this wasted resource. These partnerships aim to turn flared gas into a steady supply of fuel for power plants, reducing the need for imports.

The numbers are staggering. Iraq flares billions of cubic feet of gas annually, enough to power millions of homes if properly harnessed. By redirecting this resource, the country could not only meet its domestic energy needs but also position itself as a regional energy hub. It’s the kind of bold thinking that makes you wonder: why hasn’t this been done sooner?

• Reduce waste: Capturing flared gas cuts down on environmental damage.
• Boost supply: Redirecting gas to power plants strengthens the grid.
• Attract investment: International partnerships bring expertise and capital.

Foreign Investment: A Global Effort

Iraq isn’t going it alone. The country has opened its doors to a diverse array of international partners, from Gulf neighbors like Qatar and Saudi Arabia to global giants like China and Russia. Qatari investments alone have topped $5 billion, while a UAE-based company, Masdar, is set to deliver 1,000 megawatts of renewable energy. These collaborations signal Iraq’s intent to diversify its economy and reduce its reliance on any single partner—especially Iran.

China, in particular, is making significant inroads. A $2.5-billion contract with the Basra Oil Company will see Chinese firms build a massive seawater distribution network in southern Iraq, critical for oil and gas operations. Another $4-billion desalination project in Basra underscores Beijing’s growing influence. By 2030, Chinese oil companies expect to double their production in Iraq to 500,000 barrels per day, a clear sign of the country’s strategic importance.

Our economy has never been one-sided. We’re building partnerships across the globe.

– Iraqi leadership

The Geopolitical Tightrope

Here’s where things get tricky. Iraq’s push for energy independence isn’t just about economics—it’s deeply entangled in geopolitics. The United States, a key ally, has been ramping up pressure on Baghdad to cut ties with Iran. Recent Western sanctions, including the reimposition of restrictions from the 2015 nuclear deal, have tightened the screws. The U.S. Treasury now exerts significant oversight over Iraq’s financial sector, raising the stakes for compliance.

According to senior Iraqi officials, Washington is pushing for more than just energy diversification. Demands include prosecuting resistance leaders and reforming Iraq’s financial and judicial systems. It’s a tall order, and one that could strain Iraq’s delicate balancing act between its Western allies and Iran-aligned factions within its own borders. Personally, I find the U.S.’s approach a bit heavy-handed—can Iraq really pivot so quickly without destabilizing its fragile political landscape?

Challenges on the Horizon

Let’s not sugarcoat it: Iraq’s plan is ambitious, but it’s not without risks. The national grid, battered by years of neglect and corruption, is in dire need of an overhaul. Private generators, while a stopgap, are expensive and environmentally disastrous. Then there’s the issue of sanctions. If Western restrictions on Iran tighten further, Iraq could face disruptions in its gas supply before its new projects come online.

Another challenge is the sheer scale of investment required. While partnerships with global firms are promising, coordinating such a diverse group—China, Russia, the Gulf, and Western companies—could lead to logistical headaches. And let’s not forget the domestic political pressures. Iran-aligned factions within Iraq’s government have already warned that U.S. pressure could invite regional tensions, potentially even Israeli strikes. It’s a lot to juggle for a country still rebuilding from years of conflict.

What This Means for Global Markets

Iraq’s push for energy independence isn’t just a local story—it has ripple effects across global markets. As OPEC’s second-largest producer, Iraq’s ability to boost its oil and gas output could influence energy prices worldwide. The involvement of China, in particular, signals a shift in the region’s energy dynamics. Beijing’s growing footprint in Iraq could challenge Western dominance in the Middle East, raising questions about long-term geopolitical alignments.

For investors, Iraq’s energy sector is becoming a hotspot. The influx of foreign capital, from Gulf states to European firms, suggests confidence in Iraq’s potential. But there’s a catch: political instability and external pressures could make these investments riskier than they appear. Perhaps the most interesting aspect is how Iraq balances these competing interests while keeping its citizens’ needs front and center.

A Glimpse Into the Future

By 2028, Iraq hopes to stand on its own energy feet, free from the constraints of Iranian gas imports. If successful, this could be a turning point—not just for Iraq, but for the entire region. A more self-sufficient Iraq could stabilize its economy, improve living standards, and even reshape its foreign policy. But the road ahead is bumpy, and success is far from guaranteed.

In my view, the real wildcard here is time. Three years is a tight timeline to overhaul an energy system, secure billions in investment, and navigate geopolitical minefields. Yet, the fact that Iraq is even attempting this shift is a testament to its resilience. Will they make it? Only time will tell, but one thing’s clear: the world will be watching.

Iraq’s Energy Roadmap:
  2025: Begin flared gas capture
  2026: Expand renewable projects
  2027: Reduce Iranian gas imports
  2028: Achieve energy independence

Iraq’s journey toward energy independence is more than a policy shift—it’s a bold statement of intent. By leveraging international partnerships, tackling gas flaring, and navigating geopolitical pressures, Iraq is aiming for a future where it controls its own destiny. Whether it succeeds or stumbles, the outcome will shape the region’s energy landscape for years to come.