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Iran and Iraq signed an agreement on Wednesday to expand energy ties and establish a joint office aimed at overlooking cooperation between the two countries, the Iraqi Oil Ministry announced, coming as part of Iranian Oil Minister Javad Owji's visit to Baghdad.

Upon arriving in the Iraqi capital, Owji was received by Prime Minister Mohammed Shia al-Sudani and discussed with him "the overall cooperation between Iraq and Iran, and ways to develop them," as well as the ability to jointly confront "global economic challenges."

The energy agreement was signed between Owji and Iraqi Oil Minister Hayan Abdul Ghanni. The meeting between Sudani, Owji, and Abdul Ghanni "resulted in an agreement to establish committees to discuss the development of joint fields under international agreements and cooperation in refining, petrochemicals, as well as oil exploration and infrastructure development," an Iraqi Oil Ministry statement reads.

According to the statement, the Iranian oil minister expressed his country's desire "to expand the horizons of cooperation in the implementation of joint projects in oil and gas sectors, projects for the construction and development of oil refineries, the expansion of oil and gas pipelines, and environmental cleanup."

On Tuesday, Iran's President Ebrahim Raisi called for expanding energy ties between Iraq and Iran.

Raisi also emphasized the need for Baghdad "fulfill its commitments" regarding gas and electricity payments owed to Tehran.

As a result of harsh US sanctions, billions in Iraqi funds owed to Tehran have been frozen as an attempt by Washington to pressure Iraq into avoiding energy cooperation with the Islamic Republic.

Iraq has paid around $1.6 billion out of the staggering debt; however, US sanctions continue to complicate matters. Due to the sanctions on Iran, Iraq is only allowed to receive Iranian energy imports and pay for them via waivers that extend up to 120 days, a policy implemented by former US president Donald Trump and kept in place by current President Joe Biden.

In March, an Iranian trade official announced that a US sanction waiver resulted in Iran receiving another $500 million from Iraq. Iran provides a third of Iraq's electricity and gas supplies, and the two countries continue to cooperate despite the complications.

As a result of US economic hegemony, Iraq is one of the many regional countries considering the path of de-dollarization and fiscal independence from the west.

By The Cradle via Zerohedge.com

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