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Iranian policy towards post-Saddam Iraq
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state would be a bonanza for the Islamic Republic of Iran. However, it should be borne
in mind that such a region would directly border Iranian territory primarily inhabited by
marginalized ethnic Iranian Shia Arabs, who sit on the vast majority of Iran’s oil reserves.
Iranian law stipulates that a mere few percentage points of oil proceeds go directly back to
oil-producing regions. In the context of the history of destruction in this region during the
1980-88 Iran-Iraq War, and the Iranian government’s subsequent failure to fully pursue
investment, the emergence of an independent Arab Shia state awash in oil wealth is likely
to cause concerns in Tehran that on some levels touch the same nerves as an independent
Iraqi Kurdistan would.
Search for qualified stability
Discussion of Iranian interest in Iraq’s territorial integrity leads to the question of Iran’s
interest in qualified stability in Iraq. The term “qualified” is used here to explain what Iran
seeks by outlining what it does not seek.
The Islamic Republic of Iran has no interest in witnessing the emergence of an Iraqi
central government capable of constituting a direct threat to Iranian national security.
The 1980-88 Iran-Iraq war was the longest armed conflict since World War Two, costing
hundreds of thousands of lives and immense material damage. This conflict greatly shaped
the Islamic Republic, including its discourse, and continues to do so to this very day.
At the same time, Iran has a vital interest in preventing the emergence of breeding
grounds for the emergence of lesser, but also concerning, threats such as the Islamic State
in Iraq and Shaam [the Levant] (ISIS). In other words, while Tehran has no interest in a
formidable Iraqi state, it also has no interest in the Iraqi state being incapable of exercising
sovereignty in the most basic sense of the term: i.e. the state monopolizing violence. The
outcome of the dynamic between these two interests is directly linked to the aforementioned
discussion of Iranian views towards Iraqi territorial integrity. It is also highly relevant to the
formation of grander Iranian policy towards Iraq.
Expansion of Iran’s economic sphere
Lost in the debate on Iranian influence in Iraq, which overly focuses on sectarianism
and security considerations, is discussion of important economic interests.
Economics plays a considerable part in the shaping of Iranian views towards Iraq,
which is a multi-billion dollar market for Iranian goods and services. Beyond pursuit of
interdependence as a long-term approach to reduce the potential for conflict, economic
ties are viewed as a tool to leverage and diversify political influence. Over a decade after the
American-led overthrow of Saddam Hussein’s regime, Iran is Iraq’s second-largest non-oil
trading partner. Iran is only surpassed by Turkey in terms of Iraq’s non-oil trade with the
world. Importantly, the majority of this trade is carried out via territory controlled by the
landlocked KRG.
Beyond non-oil trade, Iraq’s energy sector holds great consequence for the Iranian
economy. Iraq possesses one of the world’s largest oil reserves, and despite continuous
instability and violence, has steadily developed its energy infrastructure over the past