Iran has signed a $4 billion contract with Iraq in the field of exporting technology and engineering services, said the president of the Iranian Oil, Gas and Petrochemicals Exporters Association (OPEX).
The deal will offset some of the shortfall in Iranian exports to Iraq over the past year in the areas of technical and engineering services, futures, production and medical.
“In eight months of this year [beginning on March 20]excluding electricity, exports to Iraq totaled $4.7 billion, down $1.4 billion compared to the same period last year,” said Hamid Hosseini.
Officials said they expected Iraqi imports to rise in the next four months, citing last year’s shock to the Iraqi market and uncertainty over the formation of a government in the Arab country.
Iranian exports to Iraq are expected to reach $8-9 billion, Hosseini said.
Iraq’s new prime minister, Mohammed Shi’ar al-Sudani, made a full-day visit to Iran on Tuesday and was greeted by President Ebrahim Raisi, who expressed hope for stronger ties.
Banking, finance and broader business topics were also discussed, Raeisi said, with talks between the two allies “helping to resolve bilateral issues”.
Sudani thanked Iran for the continued supply of gas and electricity that Iraq is lacking, and pointed to discussion of a “mechanism” that would allow Iraq to pay Iran for these services.
Iraq depends on Iran for natural gas, which produces 45% of the 14,000 megawatts of electricity consumed daily. Iran directly transmits another 1,000 megawatts, making it a vital source of energy for its Arab neighbors.
The United States had to repeatedly extend sanctions waivers for 45, 90, or 120 days to allow Baghdad to import Iranian energy, but the close ties between Baghdad and Tehran I am dissatisfied with the trade.
Years of war following the US invasion in 2003 have left Iraq’s power infrastructure in tatters, leaving the country with a power shortage of approximately 7,000 megawatts.
In the past, Baghdad officials have said there was no easy alternative to importing from Iran, as it would take years to properly build Iraq’s energy infrastructure.
They say the US demands neither acknowledge Iraq’s energy needs nor the complex relationship between Baghdad and Tehran.
Iraq also imports a wide range of goods from Iran, including food, agricultural products, home appliances, air conditioners and auto parts.
