“Since 2003, we have experienced a noticeable growth in goods export to Iraq, to an extent that 33% of all our non-oil exports is to Iraq,” Hassan Danaeifar, secretary of the Committee to Develop Iranian Economic Ties with Iraq and Syria said in the western province of Lorestan.
Iran exported just over 790 million dollars’ worth of goods and services to Iraq in 2006, Danaeifar said. That figure has now soared to 12 billion dollars.
Washington re-imposed crippling sanctions on Iran in November 2018 after withdrawing from the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, in May of that year.
Iran’s dealings with its western neighbor have since come under increased scrutiny from the American Treasury officials in charge of implementing economic sanctions on Iran.
Suffering from a long-term lack of investment in its national grid and increasing demand, Iraq’s southern provinces have relied on Iran’s supply of electricity and natural gas for more than a decade.
While the US has pressured Iraq to cut its energy ties with Iran, it has been forced to grant Iraq short-term exceptions. Four energy waivers have been offered to Baghdad since 2018 to allow continued imports of natural gas and electricity from Iran.
“Currently, our exchange with Iraq is in the fields of engineering, energy and tourism, and we are ushering in a new phase of cooperation and exports to Iraq,” Danaeifar said. “Today Iraq is in a post-Daesh era and needs $300 billion for reconstruction. We believe that we have overcome the phase of exporting goods to Iraq; we need to think about joint production.”
Danaeifar, an architect of Iran-Iraq relations following the overthrow of the Saddam Hussein regime in 2003, is a towering Iranian figure of influence in Iraq. He is a senior Iranian Revolutionary Guard Corps (IRGC) commander, and former Iran ambassador to Iraq from 2010 to 2017.
US Treasury officials have frequented both Baghdad and Erbil in recent months to put pressure on Iraq to cut their ties with on Iran as part of the US maximum pressure on Tehran.
However, given Iran’s long term relations with the main political forces in Iraq over the last four decades, Tehran hopes to turn this challenge into an undermining of sanctions and an opportunity for trade.
An Iranian parliament analysis of US economic pressure said this week that while Iran is under pressure from US allies in the region, including Saudi Arabia, UAE , Kuwait and Bahrain, Iran “is using its close ties to the Shiite government of Iraq to circumvent the sanctions.”
