Iraq’s energy landscape faces significant challenges that require urgent attention, particularly in ensuring a consistent and reliable gas supply. With a staggering requirement of approximately 8 billion standard cubic feet per day (scfd), achieving uninterrupted power generation is essential for the country. Insights from Ahmed Mufti, the deputy minister at the Kurdistan Regional Government’s Ministry of Natural Resources, highlight the pressing need for action to improve Iraq’s energy supply.
Inefficiencies and Fuel Subsidies
In the realm of energy management, waste is a primary concern. Mufti estimates that inefficiencies in the sector cost Iraq an alarming $10 billion annually, equivalent to around AED 36.7 billion. Additionally, the Iraqi government allocates another $8 billion each year to subsidize industrial fuel for key sectors like cement and steel production. Mufti advocates for a strategic shift in the subsidy structure, suggesting that part of these funds be redirected toward developing gas fields and enhancing transportation infrastructure. This realignment could enable industrial facilities to transition more effectively to gas, thereby optimizing energy use and reducing waste.
Demand for Gas Licensing Initiatives
To bolster domestic gas production and lessen dependence on imports, Mufti has called for the Iraqi government to implement investment licensing rounds for several gas fields, including Akkas, Khashm Al-Ahmar, and Mansuriya, along with locations in Diyala and western Iraq. This initiative aims to create a favorable climate for investors by offering legal, security, and financial guarantees. Ensuring the settlement of outstanding payments to oil and gas companies would further foster a conducive environment for investment in Iraqi gas resources.
Upcoming Developments in Kurdistan
The Kurdistan Region has witnessed notable increases in gas production. The Khor Mor field, for instance, surged from around 350 million scfd in 2020 to approximately 750 million scfd recently. Currently, total output in the Kurdistan Region is on track to reach close to 1 billion scfd. Mufti also pointed out that with appropriate investments and operating conditions, further development of fields like Chamchamal, Kurd Mir, and Topkhana could potentially elevate regional production to between 2 and 3 billion scfd.
With the recent collaboration between Dana Gas and Crescent Petroleum, the Khor Mor gas supply to Iraq’s Ministry of Electricity is underway. Starting from August, the initial supply of 100 million scfd is dedicated to the Kirkuk Taza power station, marking a significant step toward addressing the country’s energy needs.
Addressing the Electricity Supply Shortfall
The gap in electricity supply remains a critical concern for Iraq. Gas imports from Iran, which previously fed numerous power plants, have decreased significantly—from 9 billion cubic meters in 2024 to merely 6 billion in 2025, as reported by a World Bank analysis cited by Forbes Middle East. In light of this decline, the Ministry of Electricity claims that it is prepared to provide the grid with a capacity of between 29,000 to 30,000 megawatts. However, this falls short of the projected peak summer demand, which could reach around 60,000 megawatts.
The need for consistent gas supply, infrastructure improvements, and revised subsidy policies is evident. Addressing these issues is crucial for Iraq to achieve a stable energy future and meet growing demand effectively. Through strategic investments and reforms, Iraq can pave the way for a more sustainable and efficient energy framework.