Iraq's Summer Power Gap Widens After Iranian Gas Flows Collapse Following the South Pars Strike

Iraq is ending another summer of long power cuts, with the gap between demand and supply wider than in recent years. The main new factor is the collapse of Iranian gas supplies. The National reported on 18 March 2026 that Iraq had lost a significant part of its generation capacity after Iran halted gas flows following an attack on the South Pars gas field. Iranian gas is a major fuel for Iraqi power stations, and the shortfall carried into the summer, when extreme heat pushes electricity demand far above what Iraq's grid can supply.

South Pars, which Iran shares with Qatar, where the field is known as the North Field, is the world's largest natural gas reservoir. Iraq relies on Iranian gas for roughly a third to 40% of the fuel used in its power stations, according to analysis by the Dhia Jafar energy research centre at the American University of Iraq, Sulaimani (AUIS). Iraq has paid for Iranian gas and electricity through accounts held in Iraqi banks, under waivers granted by the United States from sanctions on Iran.

Iraqi summers are among the hottest in the world, with temperatures in Baghdad and Basra regularly above 45°C. Electricity demand is driven by air conditioning and rises sharply in June, July and August. The shortfall is met partly by private neighbourhood generators, which run on diesel and supply households for a fee. Iraq flares large volumes of associated gas produced alongside its oil, mainly in the southern oil fields. Iraq is among the countries most exposed to rising temperatures and water scarcity.

The halt of Iranian gas exports also affects Turkey, which imports Iranian gas under a long-term contract, though Turkey has more diversified supply. For global markets, the disruption to Iraqi power generation could increase Iraq's demand for fuel oil and diesel to run power plants and private generators, at a time when product markets are already tight because of the Hormuz disruption.