Iraq's electricity minister said on Monday that the country will be "deprived of power" if the US decides to end its sanction waivers that has allowed Baghdad to purchase Iranian energy such as gas and electricity.
The US has granted eight countries a six-month exemption allowing them buy Iranian hydrocarbon products despite Washington's embargo, which took effect in November, but Washington announced the end of the waiver on Monday.
Iraq has received separate extensions to continue importing Iranian gas since the imposition of the economic embargo.
Baghdad was granted an extra 90-day waiver in March and it remains unclear whether it will be extended once again.
“If this stops then we will be deprived of 4,000 megawatts of electricity,” Musab Al Mudaris, spokesman for the Iraqi ministry of electricity, said told reporters on the sidelines of an energy forum in Baghdad on Monday.
The figure is a quarter of Iraq's production capacity.
The waiver stipulates that the countries must take steps to reduce Iranian purchases and move towards ending imports.
Iraq relies heavily on Iranian gas imports to feed its power grid.
The electricity ministry said it is planning to increase gas imports to from 28 million cubic meters to 35 million in June.
The deadline for renewing the waivers is May 2.
Washington has encouraged Iraqi officials to break its dependence on Iran and develop its own gas and power sectors.
"We are continuing to work with Iraq to increase its energy independence. Expanding the use of Iraq's own natural resources and diversifying energy imports will strengthen Iraq's economy and development as well as encourage a united, democratic, and prosperous Iraq free from malign outside influences," a state department official told The National.
Earlier this month, Iraq's Parliamentary Speaker Mohammed Al Halbousi said he hoped Washington would waiver sanctions on energy imports from Iran for the next three years.
The embargo is seeking seek to reduce Tehran’s influence in the region.
Tehran has increasingly pursued close relations with Baghdad as it faces the US embargo, following the US President Donald Trump's decision last year to withdraw from the 2015 Iran nuclear deal.
Iraq experienced chronic blackouts that triggered mass protests and unrest across the south last summer.
Residents took to the streets to demand better public services and employment opportunities.
As summer nears, Iraq's power sector is again expected to fail to match demand, with renewed protests likely.
Since the fall of former dictator Saddam Hussein, Iraq has built solid relations with Iran, despite Washington’s repeated warnings.
Iraq imports food and other goods from Iran, and the two have kept close political ties.
Trade between the two countries is expected to reach $8.5 billion this year.
Meanwhile, Baghdad signed last week a memorandum of understanding with Saudi Arabia for a deal to boost the country's electricity, Mr Al Mudaris said.
The deal, which will see 280 kilometres of power lines built to connect the two countries, is planned to take about one year to complete after a feasibility study has been completed.