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Mohammad Ali Shabani
decade. In parallel, Western-led sanctions on Iran’s energy sector have had a devastating
impact in recent years. Iranian crude oil production has been cut from some 3.8-4 million
barrels per day (mbpd) in 2011 to 3 mbpd in 2015. Exports have also been hit; in 2011, Iran
exported 2.5 mbpd of crude oil, while it currently exports some 1.4 mbpd.
There has been plenty of debate on the role stepped-up Saudi oil production has
played in enabling the effective implementation of Western sanctions on Iran. This
has been put into the context of greater Saudi-Iranian rivalry for political influence,
and has even been given a sectarian layer. Yet, few have paid attention to the parallel
reality that Shia-led Iraq has during the past years also played a great role in enabling
Western sanctions on Iran. Iraq is currently producing over 4 million barrels per day of
crude oil, the most ever recorded in the country’s history. Moreover, Iraq is currently
selling twice as much oil as Iran, much of it to important Iranian customers, including
in Asia. This dynamic shatters the overly sectarian, one-sided reading of contemporary
Iranian-Iraqi relations, and reveals the foundations for what can logically be termed
an Iranian predisposition to view the development of the Iraqi oil sector as not wholly
benign for Iranian interests.
However, it is important to note that Iran has reportedly chosen to counter this
challenge via cooperation rather than confrontation. There are numerous reports of Iran
having evaded Western sanctions by disguising its oil as Iraqi crude via ship-to-ship transfers
in the Persian Gulf. The Iraqi financial system has also reportedly been used to lessen the
pressure of Western sanctions on Iran. Whether these measures have been coordinated on
a state-to-state level is unclear, but nonetheless suggest one aspect of a probable give-and-
take approach to the issue of Iraq’s rising oil export proceeds.
More importantly, Iranian energy policy towards Iraq has resulted in the promotion
of oil swaps, exports of natural gas, sales of electricity as well as plans for Iraq to act as a
conduit for potential future Iranian natural gas exports to Europe via Turkish territory. In
short, Iran has assumed a proactive position in terms of how it deals with the development
of the Iraqi economy.
Key aspects of Iranian influence
The fundamental outline of Iranian interests in Iraq discussed above provides a basis
for a grasp of how the Islamic Republic seeks to achieve those interests. In practical terms,
Tehran largely follows five basic guiding principles in the formation and implementation
of its policy towards Iraq:
Playing the long game
The Islamic Republic of Iran’s relations with its Iraqi partners and other political players
oftentimes go back decades, and not years. Dawah, the main Shia Iraqi political player,
has a longstanding and complex relationship with Tehran. Prominent Dawah official, and
former Iraqi Prime Minister, Nuri Kamal al-Maliki spent time in Iran following his exile
from Iraq, prior to his relocation to Syria. The aforementioned applies to numerous other
current senior Dawah officials.