The Trump administration has canceled a waiver that allowed Iraq to purchase electricity from Iran, according to Reuters. The decision, announced on Saturday, is part of President Donald Trump's campaign against Tehran that aims to stop Iran's nuclear program, limit its missile development, and reduce its support for terrorist groups.

The move comes shortly after Trump returned to office in January and restored his "maximum pressure" policy on Iran. During his first term, Trump withdrew the United States from the multinational Iran nuclear deal, which was designed to prevent Iran from developing nuclear weapons.

US officials have stated their goal is to isolate Iran economically and eliminate its oil export revenues to slow Tehran's nuclear weapon development. Iran has consistently denied pursuing nuclear weapons, maintaining that its program serves peaceful purposes.

For Iraq, the end of the waiver creates "temporary operational challenges," according to Farhad Alaaeldin, foreign affairs adviser to Iraqi Prime Minister Mohammed Shia al-Sudani. The Iraqi government is now working on alternatives to maintain electricity supply and prevent potential disruptions.

The US has imposed various sanctions on Iran over its nuclear activities and support for militant groups. These sanctions effectively prohibit countries from doing business with both Iran and the United States simultaneously.

National Security spokesperson James Hewitt stated, "President Trump has been clear that the Iranian Regime must cease its ambitions for a nuclear weapon or face Maximum Pressure. We hope the regime will put the interests of its people and the region ahead of its destabilizing policies."

The State Department has called on Iraq to end its dependence on Iranian energy sources, describing Iran as "an unreliable energy supplier." According to the spokesperson, Iranian electricity imports represented only 4% of Iraq's electricity consumption in 2023.

US officials have also used the waiver review process to pressure Baghdad to:

• Allow Kurdish crude oil exports via Turkey
• Boost global oil supply
• Keep energy prices in check
• Create more flexibility for US efforts to restrict Iranian oil exports

The State Department suggested that Iraq's energy transition presents opportunities for US companies, which have expertise in improving power plant productivity, enhancing electricity grids, and developing connections with "reliable partners."

The decision comes as Middle Eastern financial institutions expand into new markets. Emirates NBD, a major banking group owned by the Dubai government, launched cryptocurrency trading services on March 5 through its digital banking app Liv X, allowing UAE customers to trade Bitcoin, Ethereum, and three other major cryptocurrencies.