TEHRAN, Iran, July 10
Trend:
Iran and Iraq trade shall improve following the borders reopening, said the head of Iran–Iraq Joint Chamber of Commerce.
Hamid Hosseini has discussed cooperation between the two countries in the oil and gas sector in an interview with Trend.
"Iraq has 3,000 billion cubic meter gas reserves, which are not fully used so far; therefore, Iran has good opportunity to cooperate with Iraq in the gas sector," Hosseini said.
"Iraq imports oil products and intends to develop its refinery plants but has not reached a result yet. Iran mainly cooperate with Iraq in oil, gas and power sectors including oil products' export via Kurdistan region," the head of the chamber added. "The trade of oil products between the two countries is high, and the sale of Iran's oil products to Iraq via stock exchange was good in May."
"It's too soon to predict future oil cooperation between Iran and the new Iraqi government. We should wait if any agreements will be signed during a visit of Prime Minister Mustafa al-Kazemi to Iran. We shall also see if existing agreements on industrial cities, transit and oil cooperation will continue to be implemented and if we can launch joint commercial commission," Hosseini said.
"Iran has exported $9 billion worth of goods to Iraq during 2018 and 2019," he said. "The private sector can return foreign exchange revenues back to Iran via foreign exchange offices in Iraq. Iranian exporters were concerned over the issue, but setting up a channel between foreign currency agencies of Iran and Iraq solved the problem."
"The other problem is public contracts. The Central Bank of Iran (CBI) and their Iraqi counterparts agreed the ways to arrange the payment for power and gas export, but later transactions via SWIFT become problematic due to the sanctions, and the money in CBI account in Iraqi bank was blocked," he added.
"Iraq's debt to Iran for gas and power export is about $5 billion that is in Iran's saving account at the Iraqi bank. According to statistics, Iran has exporting 42 million cubic meter gas and around 1,200 megawatt electricity per day to Iraq, that amounts to power export worth up to $800 million," he said. "Transfer of these funds to Iran would stabilize Iran's foreign currency market which is chaotic now."
"Iran's export to Iraq declined to $300 million in February and March due to closure of boarders in February and March, then increased to $800 million in May, and currently, more than 2,000 trucks transport cargo to Iraq via Mehran Customs and Kurdistan region," he said.