he United States has told Iraq that it will be allowed to keep importing crucial gas, energy supplies and food items from Iran after Washington reimposes sanctions on Tehran’s oil sector, three Iraqi officials said on Friday.

The waiver is conditional on Iraq not paying Iran for the imports in US dollars, said the officials, who included a member of Iraq’s ministerial committee that oversees energy activities, Reuters reported.

According to President of Iran-Iraq Chamber of Commerce Yahya Al-e Es’haq, the US dollar has been completely eliminated from trade deals conducted between Iran and Iraq due to US sanctions, as the neighboring countries have shifted toward the euro and their national currencies.

Dollar transactions between Iran and Iraq have been removed and a majority of deals are now being conducted with the euro, rial and Iraqi dinar,” the official was recently quoted as saying.

The new wave of US sanctions take effect on Nov. 4.

The ministerial committee official said Iraq’s Finance Ministry had set up an account with a state-run bank where Baghdad would deposit in Iraqi dinars the amounts owed to Iran for the imports.

Central bank officials said in August that Iraq’s economy is so closely linked to Iran’s that Baghdad would ask Washington for permission to ignore some US sanctions.

Iraq imports crucial supplies from its neighbor, including gas for power stations. In fact, the country is Iran’s biggest export destination for non-oil products.

Latest report by the Islamic Republic of Iran Customs Administration reviewing the seven months of the current Iranian year (March 21-October 22) shows Iraq overtook China as the main non-oil export market of Iran.

Iran’s exports to Iraq surged by 55% in value and more than 65% in weight to reach $5.73 billion to constitute 21% of the total value of Iran’s exports during the period.

Iran’s non-oil exports to Iraq mainly include construction materials and automobiles, including spare parts, liquefied gas, hydrocarbons, mineral products, fresh or frozen tomatoes and evaporative coolers to Iraq. The proximity of the two countries and abundance of joint border crossings also mean the neighbors can easily engage in cross-border trade. The port of Khorramshahr also plays a major role in bilateral trade.

Secretary-General of Iran-Iraq Chamber of Commerce Hamid Hosseini said as Iraq is beginning to rebuild the infrastructure destroyed by terrorists, a number of its cities, especially Mosul and Kirkuk, can become a suitable market for Iranian construction materials and foodstuff.

“Iraq has six million displaced citizens, four million of whom have returned after Daesh was defeated. Iranian products can be the best option to provide for these people, but our share in the markets of Mosul and Kirkuk is relatively low at present and we need to increase it,” he told IRNA recently.

Referring to a trade delegation from Mosul that recently visited Tehran for the first time in 15 year, Hosseini said the visit is a testament to Iraqis’ increased preference for Iranian goods.

Source: FINANCIAL TRIBUNE