Iranian president Hassan Rouhani has returned from his first-ever trip to Iraq with a raft of agreements for expanded trade, cross-border infrastructure, and pledges of greater cooperation with Baghdad.
Leaders of both countries embraced strengthening ties — something Washington has been watching closely.
Iran is upping its game in Iraq as U.S. influence recedes, deepening ties with its war-weary neighbor and betting on bilateral economic activity to help offset tough sanctions imposed by the Trump administration.
Iraq is "another channel for Iran to bypass America's unjust sanctions ... this trip will provide opportunities for Iran's economy," a senior Iranian official on the trip was quoted as telling Reuters last week. The Trump administration reinstated sanctions on Iran last year for what it deemed "destabilizing and malign activities around the world," and the country's economy has since been in a tailspin.
With a massive shared border and religious and cultural ties — and the major role of Iranian-backed paramilitaries in Iraq's defeat of the Islamic State — the Islamic Republic's influence in Iraq is entrenched.
Rouhani and Iraqi Prime Minister Adel Abdul-Mahdi signed memorandums of understanding across sectors including trade, oil, health, mining, visa-free travel, and perhaps most significantly a railway that would connect Iraq's southern oil-rich city of Basra to Iran's border.