After an eight-hour trip to Iraq June 17, the Governor of the Central Bank of Iran (CBI), Abdolnasser Hemmati, announced that Baghdad had agreed to settle its gas and electricity-related debts to Tehran by providing food and medicine to Iran.
The Islamic Republic state-run Mehr News Agency (MNA) also cited the newly elected Iraqi Prime Minister, Mustafa al-Kadhimi, as saying at his meeting with Hemmati, "Iraq will cooperate with Iran to solve the problems for payments of natural gas. I have given the necessary orders to the relevant officials.
Since the Islamic Republic is under U.S. banking sanctions, Iraq cannot transfer foreign currency to Tehran for gas and electricity imported from Iran.
Iranian officials have repeatedly referred to Iraq's $ 2 billion overdue debt to Iran. Iraqi officials, for their part, maintain that the money was transferred to Iran's account at the Tejarat Bank of Iraq. However, because of sanctions, Iran can only import goods from Iraq.
Iran's non-oil exports to Iraq alone (excluding electricity and gas) in 2018 amounted to $ 9 billion, and its total imports from Iraq amounted to $ 59 million. The value of Iran's annual exports of electricity and gas to Iraq is estimated at $ 2 billion.
Since the beginning of the Iranian calendar year 1398 (March 21, 2019), Tehran has stopped publishing details of its foreign trade, while the details of the current Iran-Iraq trade are also not clear.
Furthermore, in a report last fall, the World Bank announced that it was deeply concerned about "Iraq's dependence on food imports." Therefore, it is unclear how Baghdad will be able to pay back its debt to Tehran by sending food and medicine to Iran.
It is also unclear whether Tehran wants to buy food and medicine that Iraq has imported from other countries.