DUBAI — The Trump administration is granting Iraq a renewed 90-day waiver exempting it from U.S. sanctions on Iran, a State Department official told CNBC on Tuesday.

The waiver, last issued in December and which expired on the morning of March 19, will allow Iraq to continue buying electricity from its neighbor even as the White House pledges a maximum pressure campaign against Tehran.

"While this waiver is intended to help Iraq mitigate energy shortages, we continue to discuss our Iran-related sanctions with our partners in Iraq," the official said on condition of anonymity to discuss the matter.

Despite being OPEC's second-largest producer of oil, years of war and lack of investment have left Iraq dependent on Iranian natural gas plants for up to 45 percent of its electricity.

The Trump administration reinstated sanctions on Iran last year after withdrawing from the Joint Comprehensive Plan of Action, which lifted economic restrictions on Iran in exchange for curbs to its nuclear program. The White House is carrying out a "maximum pressure" campaign against the Islamic Republic in an effort to counter what it deems its "malign and destabilizing activity" around the world.