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At a time when its economic interests are threatened both by Saudi Arabia's attempts to develop economic cooperation with Iraq and the likelihood of renewed sanctions following the U.S. withdrawal from the Joint Comprehensive Plan of Action, Iran is increasingly focused on securing its access to the Iraqi market, the second-biggest importer of Iranian non-oil commodities.The U.S. withdrawal from the JCPOA on May 8, which will likely decrease Iran's revenues from crude oil exports and foreign trade, pushes Tehran not only to compensate for its trade losses through the KRI but also to further project economic influence in Iraq and beyond in war-ridden Syria, Iran's geostrategically indispensable ally. However, due to its own difficult financial situation – likely to worsen under renewed sanctions – Iran is likely unable to afford funding substantial reconstruction projects in Iraq.In the long run, Iran probably hopes that Iraq's "high economic potential" given its oil resources, cultural significance and need for reconstruction will allow Iranian organizations to channel soft power by lending their technical expertise to expand the economic involvement of such Iraqi paramilitary entities, which would therefore be more competitive than other organizations.
Iran’s hydra-headed hydro problem water scarcity
The dilemma of KRG trade routes
Iran’s banking sector reforms
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