Iraq’s PM renounces his commitment to US sanctions on Iran

Iraqi Prime Minister Haider al-Abadi announces that his government will only respect the dollar ban in transactions with Iran.

Iraqi Prime Minister Haider al-Abadi

By Sohaila Barghash

Abadi stated in a news conference in Baghdad saying “I did not say we abide by the sanctions, I said we abide by not using dollars in transactions. We have no other choice.”

Last week the PM also described the US sanctions on Iran as a “strategic mistake” and “incorrect”, yet said that Iraq would abide by them to safeguard its own interests.

Abadi’s statement then triggered criticism from various Iraqi political parties that see Iran as an alley.

The United States and Iran are Iraq’s biggest partners, which is why the sanctions put Abadi’s government in a difficult position.

The US sanctions basically target Iran’s trade in gold, other metals trading, coal, industrial software and the auto sector. As well as its purchases of US dollars and its car industry.

However, the most severe measures targeting Iran’s oil exports do not take effect until four more months.

Abadi also said his government is still reviewing whether to import commodities, appliances and equipment by government companies from Iran.

On 7 August, US President Donald Trump vowed that as soon as US sanctions against Iran are executed, firms doing business with Tehran would be barred from the United States.

Global oil prices rose last week as concerns that sanctions could cut world supply increase.

Generally, Iraq is a key market for Iranian products, as the two countries also enjoy $12bn trade volume between April 2017 and March 2018 in various fields like oil, gas, religious tourism and engineering services.

As a result, Iran’s exports to Iraq made a total of 18 percent of its total exports in 2017.

Iraq, having significant Shia shrines, is an important tourist destination for Iranians.

For instance, in 2017, Iraq’s revenue during one week of Ashura was $100m, with pilgrims mainly coming from Iran and some Gulf countries.

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