US sanctions on Iran put Iraq’s trade and energy ties at risk

BAGHDAD, Iraq — New US sanctions targeting transactions with Iran’s designated sectors could expose countries, companies and financial institutions to secondary sanctions. The measures cover digital assets, technology, gold, aviation and maritime transport, along with people, entities and vessels linked to Iran’s oil, financial, military, nuclear and cyber programmes. Iraq could be directly affected because its trade with Iran exceeded $10 billion in 2025 and its electricity generation depends on Iranian gas. Esam al-Fili, a university lecturer, said Iraq must use official channels and the international banking system, leaving Baghdad at risk if Washington sanctions parties dealing with Iran. Iraqi Parliament Foreign Relations Committee member Mukhtar al-Musawi said Baghdad may seek an exemption because of its energy needs, but warned that it could lose access to the US dollar financing system. Reduced ship traffic through the Strait of Hormuz could also affect Iraqi oil exports and energy trade with Iran. Iran allowed some Iraqi oil tankers to pass on August 22 after diplomatic efforts. Iraq is considering alternative export routes through Ceyhan Port and via Syria and Jordan, but establishing new routes could take years.