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

The waiver 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 sensitive topics.