Trade and investment connections between Russia, Iraq, and Iran have a long and intricate history [8af18607]. The relationship between Russia and Iraq has expanded beyond energy, with Russian investments in Iraq estimated to be over US$19 billion [8af18607]. The energy sector remains a cornerstone of the bilateral relationship, with significant involvement of Russian oil majors in Iraq's oil industry [8af18607]. Recent engagements have further bolstered Russia's presence in Iraq's oil sector, and collaboration in the gas sector and infrastructure development projects have also been discussed [8af18607]. Additionally, sectors such as agriculture, manufacturing, and technology have experienced growth [8af18607]. However, geopolitical tensions and financial barriers pose challenges to economic relations [8af18607]. Streamlining regulatory processes, enhancing transparency, and bridging technological gaps are crucial for a balanced and sustainable economic relationship [8af18607]. Diversification across various sectors is also needed [8af18607]. High-level diplomatic engagements play a pivotal role in driving trade volumes and enhancing economic ties [8af18607].
Meanwhile, the Iranian Customs Authority announced a decline in trade with Iraq over the past 11 months [24a5f52c]. Trade with Iraq decreased by 5% in terms of value and by 1% in terms of quantity [24a5f52c]. However, trade between Iraq and Russia saw the highest increase among the top 10 trading partners, with a quantity increase of 54% and a value increase of 24% [24a5f52c]. Trade between Iraq and Iran is characterized by deep economic ties and mutual dependency, with both countries serving as significant trading partners [24a5f52c]. Energy trade, particularly in crude oil, natural gas, and electricity, forms a substantial portion of the bilateral exchange [24a5f52c]. Overall, trade between Iraq and Iran stands as a crucial component of their respective economies, offering avenues for investment, commerce, and mutual prosperity [24a5f52c].
In a related development, the volume of goods exported from the border crossings in Kermanshah province, Iran to Iraq has seen a significant increase [c7a1da30]. Exports from Kermanshah province to Iraq increased by 9% in weight and 19% in value over the past 11 months [c7a1da30]. The border crossing at Parviz Khan has become a growing transit hub in Iran, with foreign transit from this customs point surging by 262% to 3.492 million tons [c7a1da30]. On average, 650 trucks pass through the Parviz Khan borders daily, with numbers occasionally reaching 900 to 1000. Iraq has requested an increase to 1500 trucks [c7a1da30]. Iraq ranks first as the largest importer from Iran, having imported 33,561 tons of goods from Iran during the current year [c7a1da30]. This increase in trade volume between Kermanshah and Iraq further strengthens the economic ties between the two countries [c7a1da30].
Iraq has also ranked second in importing Iranian petrochemical products in April 2024 [8b6ad398]. The total imports amounted to 3,300 thousand tons, worth $1.4 billion [8b6ad398]. China, Iraq, the UAE, Turkey, Pakistan, Afghanistan, and Oman accounted for 78% of the imports and 83% of the total revenues [8b6ad398]. The Iranian customs noted changes in export item values, with increases in petroleum gases, liquefied hydrocarbons, urea, iron bars, and steel, and decreases in liquefied natural gas, iron and steel alloys, and liquefied butane [8b6ad398]. Iraq is also the largest importer from Iran, having imported 33,561 tons of goods from Iran during the current year [8b6ad398].
Iran and Iraq are set to sign 23 cooperation agreements on energy, transportation, trade, investments, and banking [742cfd00]. The agreements will be finalized during the ongoing sixth meeting of the Iran-Iraq Joint Coordination Committee for Economic Cooperation in Tehran [742cfd00]. The deals will cover energy, transportation, trade, technical and engineering services, investments, financing, and banking [742cfd00]. Five subcommittees will be dedicated to each sector [742cfd00]. Talks are also underway on additional projects, including joint ventures for industrial zone development and collaborative investments [742cfd00]. The signing ceremony is scheduled for the afternoon following a public meeting between the Iranian Minister of Economy and the Iraqi Minister of Trade [742cfd00].
Turkiye is shifting its foreign policy towards regional cooperation and economic development by focusing on building stronger bilateral relations with countries in the Middle East [05c52953]. President Recep Tayyip Erdogan’s “historic” visit to Iraq last month shows that Turkiye has decisively adopted a new foreign policy concept, seeking regional cooperation with a focus on bilateral relations [05c52953]. Turkiye had become a model country for the region before the 2011 Arab Spring uprisings, but its foreign policy balance has changed since then [05c52953]. Turkiye has been leveraging its influence in the Israel-Palestine conflict and the Iran-Israel-US triangle, while the advantage Turkiye gained with Azerbaijan in the Nagorno-Karabakh dispute strengthened Ankara’s regional hand [05c52953]. Turkiye is now turning to Iraq to strengthen its regional cooperation efforts and keep Iran in balance without excluding it completely [05c52953]. Turkiye may be endeavoring to create something similar to the Non-Aligned Movement, with Iraq as the center of this movement [05c52953]. Other regional countries such as Saudi Arabia, Jordan, Qatar, and the UAE may also step up to support the economic initiative developed by Turkiye and Iraq [05c52953]. Iraq is Turkiye's fourth largest importer and fifth largest exporter, and the two countries have a commercial exchange of 20 billion dollars [05c52953]. Iraq still ranks first in purchasing houses in Turkey since 2015 [05c52953].
The Turkish Ministry of Trade speculates that Turkish exports to Iraq will increase to $15 billion soon and $20 billion by 2030 [0cb42e00]. President Recep Tayyip Erdogan's upcoming visit to Iraq is expected to witness the signing of trade agreements between the two countries [0cb42e00]. The trade volume between Turkey and Iraq reached $24.2 billion in 2022 and $19.9 billion in 2023 [0cb42e00]. Turkish exports to Iraq decreased by 7.2% in 2023, reaching $12.8 billion, while imports from Iraq decreased by 31.1% to approximately $7.2 billion [0cb42e00]. The Turkish Minister of Trade expects exports to reach $15 billion soon and $20 billion by 2030 with the completion of the Development Road project [0cb42e00].
Parviz Khan Customs, located on the border with Iraq, ranked first in foreign transit goods traffic in Iran in April 2024 [6b0ea71c]. The customs handled the largest number of foreign transit operations from Iran to Iraq, with 486 thousand tonnes of goods [6b0ea71c]. The volume of foreign transit through Iran in April reached 1.6 million tonnes, a 47% increase compared to the previous year [6b0ea71c]. Shahid Rajaei Customs ranked second with 377 thousand tonnes, and Bashmaq Customs ranked third with 203 thousand tonnes [6b0ea71c].