In 2022, Iran and Iraq concluded contracts worth $4 billion in technology and engineering services, according to the Iranian news outlet Tasnim News Agency.

The director of the Iranian Petrochemical Products Exporters’ Association (OPEX), Hamid Hosseini, disclosed that in the past eight months, exports to Iraq amounted to $4.7 billion, $1.4 billion less compared to the same period last year.

The Iranian official went on to address the uncertainty of the formation of Iraq’s government, as well as the recent shock to the markets.

He added that Iranian exports to Iraq are bound to increase within the next four months, expecting the value to increase to $8-9 billion.

While the relationship between Iraq and Iran improved significantly over the last decade, Iran has violated Iraq’s sovereignty repeatedly with strikes on targets in Iraq’s Kurdistan Region (IKR) in recent weeks. In response to Iraq’s condemnation of Iranian operations on its territory, Tehran has criticized Baghdad and the IKR for failing to secure their border.

The Islamic Republic has for years been dealing with the ongoing threat of Kurdish separatist attacks launched by the Kurdistan Democratic Party of Iran (KDPI), a Kurdish militant group outlawed in Iran that operates in northern Iraq and has been responsible for attacks on the country’s border regions. As a result of these attacks, Iran regularly launches border security operations against the KDPI.

Meanwhile, Baghdad also announced the redeployment of troops to its shared border with Turkey and Iran on 24 November, following attacks by Tehran and Ankara against Kurdish positions in the Iraqi Kurdistan Region (IKR). Iraq officially condemned the attacks on 21 November.

“The repeated attacks carried out by Iranian and Turkish forces with missiles and drones on the Kurdistan region are a violation of Iraq’s sovereignty,” Iraq’s foreign ministry affirmed.

However, several Iraqi officials have claimed that many foreign intelligence agencies operate from the IKR, such as the CIA and Mossad.