BAGHDAD: Iraq's electricity ministry said Iranian gas supplied to the central and southern regions was reduced to 8 million cubic metres per day from 49 million, causing a risk of serious power shortages.

The ministry said in a statement on Wednesday that there has been contact with the Iranian energy ministry and Iran's embassy in Baghdad to clarify the reasons for the reduction.

A senior official in the National Iranian Gas Company (NIGC)said early on Thursday that the export reduction of 38 million cubic meters per day is based on a six-month agreement with Baghdad and with prior notice, oil Ministry's SHANA website reported.

"Iran had announced this reduction in exports to Iraq two weeks ago ... has nothing to do with their arrears to Iran, although the need to settle the debts is still on the agenda, and according to the agreement this amount of export reduction will continue for up to 6 months," the official added.

A reduction in Iranian gas supplies led the Iraqi national power system to lose about 5500 megawatts, the ministry said in a statement.

The United States has repeatedly extended by 90 or 120 days a sanctions exemption to allow Baghdad to import Iranian energy after Washington reimposed sanctions on Tehran's oil sector forbidding countries from purchasing Iranian energy.

The United States has insisted that Iraq, OPEC's second-largest producer, move towards self-sufficiency as a condition for its exemption for importing Iranian energy, yet Baghdad has struggled to do so, in part due to low oil prices.