WASHINGTON: In a significant move, the US has allowed Iran to receive payments for its energy exports to Iraq, providing the sanction-stricken nation a much-needed economic respite.

The US State Department confirmed on Monday that even though sanctions would remain in place, Iran will receive hundreds of millions of dollars from Iraq for the energy products it has sold to the neighbouring state.

At a news briefing in Washington, State Department Spokes­person Matthew Miller confirmed that Oman will manage the account, in which Iraq would deposit the money, while Iran would be able to use it, with some restrictions.

Earlier on Monday, a spokesperson for the Iranian Foreign Ministry said Oman and Qatar had agreed to manage the proposed transactions.

Asked to confirm the Iranian official’s claim, Mr Miller said, “Yes, I can confirm that Oman has indicated a willingness to receive a portion of those funds and we believe that it’s an important step.”

“[It]’s important to get that money out of Iraq because it’s a source of leverage that Iran uses against its neighbour,” he said.

Explaining the restriction, Mr Miller said the money can only be used for “non-sanctionable activities such as humanitarian assistance” and that all the transactions need to be approved by the US Treasury Department.

Iraq owes billions of dollars to Tehran for energy imports but was unable to pay as US sanctions prevented such payments. Iran has been pushing Iraq to secure US permission to release the funds, indicating that it may suspend power supplies if not paid.

Published in Dawn, July 25th, 2023

Opinion

Editorial

Slow start
Updated 15 Jun, 2024

Slow start

Despite high attendance, the NA managed to pass only a single money bill during this period.
Sindh lawlessness
Updated 15 Jun, 2024

Sindh lawlessness

A recently released report describes the law and order situation in Karachi as “worryingly poor”.
Punjab budget
15 Jun, 2024

Punjab budget

PUNJAB’S budget for 2024-25 provides much fodder to those who believe that the increased provincial share from the...
Budget and politics
Updated 14 Jun, 2024

Budget and politics

PML-N, scared of taking bold steps lest it loses whatever little public support it has, has left its traditional support — traders — virtually untouched.
New talks?
14 Jun, 2024

New talks?

WILL this prove another false start, or may we expect a more sincere effort this time? Reference is made to the...
A non-starter
14 Jun, 2024

A non-starter

WHILE the UN Security Council had earlier this week adopted a US-backed resolution calling for a ceasefire in Gaza...