Iran International
Two major energy agreements signed between US companies and the Kurdistan Regional Government (KRG) have sparked swift backlash from Baghdad and could undercut Iran’s long-standing economic and political grip on Iraq.
During a high-profile visit to Washington in May, KRG Prime Minister Masrour Barzani announced the deals with HKN Energy and WesternZagros, targeting development of the Miran and Topkhana-Kurdamir gas fields in the western part of the region near the Syrian border. Together, the projects are valued at $110 billion over their lifetime.
The US-KRG energy deals have sent a powerful message—both to Baghdad and to Tehran. If realized, they could shift Iraq’s energy independence and diminish Iran’s regional clout.
US Energy Secretary Chris Wright praised the deals at the Al-Monitor Global Institute in Washington on May 22, calling them “very aligned with President Trump’s agenda.”
He added, “We need Iraq and others off Iranian dependence.”
Secretary of State Marco Rubio met with Prime Minister Barzani in Washington on May 23. According to the State Department, the Secretary praised the energy agreements and reaffirmed US support for a strong and resilient Kurdistan Region within a sovereign and prosperous federal Iraq.
But analysts believe without a breakthrough in Baghdad-Erbil relations and tangible infrastructure investment, the deals remain aspirational—more of a political statement than a pipeline to regional transformation.
Iran’s gas grip at risk
Iran currently supplies around 25% of Iraq’s electricity needs through natural gas exports. Should the Kurdish projects proceed, that influence could be seriously eroded.
According to Iman Nasseri, Managing Director for the Middle East at FGE, Iran has little to gain financially from its gas exports to Iraq, and growing domestic shortages are shifting Tehran’s calculus.
He told Iran International, “They’re (Iraq) receiving gas for free because they have the excuse of not being able to pay due to US sanctions....Iran would welcome any scenario that could get Iraqis off the contract that they have signed with the Iranians [...] because they are short in natural gas at the moment."
Nasseri said that while the gas fields targeted by the US-KRG deals—estimated to hold 13 trillion cubic feet collectively—are indeed substantial, the main obstacles to their development have always been political and economic, not technical.
Strategic implications for Iran
Meanwhile, Baghdad swiftly denounced the agreements. Iraq’s Oil Ministry declared them “null and void." A senior Iraqi official told Reuters the central government had not been informed in advance.
KRG’s Ministry of Natural Resources defended the move, citing existing legal frameworks and long-standing contracts validated by Iraqi courts.
Energy analyst Dalga Khatinoglu told Iran International that the gas reserves in Iraqi Kurdistan—estimated at over 211.9 trillion cubic feet —are large enough to position the region as a major exporter to Turkey and Europe.
While Iran holds five times more gas, he warned, Tehran risks losing its most critical energy customers if the Kurdish fields come online.
“Iran earns $5 billion a year from gas exports to Iraq and Turkey,” Khatinoglu said, underscoring the threat to both revenue and regional influence. If Kurdish gas starts reaching Turkey and Europe, Iran not only loses market share—it loses geopolitical leverage.
US policy or political signal?
Ambassador John Craig, a former senior US diplomat, told Iran International the announcement may signal more of a “test” than a decisive turning point.
“The KRG is testing the water—to see how the Iranians react to it and how the US reacts to it,” he said, emphasizing that Iran “no longer has the punch” it once did following Israeli strikes that “took out all their munitions factories” and weakened Tehran’s regional leverage.
Craig is a former US ambassador to Oman under President Clinton and later served as director for the Middle East at the National Security Council under President George W. Bush.
He said that while the Kurdish leadership may see an opening to act more independently, the projects are far from being realized. “This is not going to happen in the next 10 months, no. It’s long term,” he said. “Exploration, production, development—it could take three to five years.”
Nasseri also described the deals as more symbolic than real, likening them to ‘wishful thinking’ without the conditions needed for execution. He emphasized that Kurdistan currently lacks a viable off-taker, adding, "you can’t develop gas without finding a place and an off-taker that can consume that gas.”
