Iraq has said it will “reluctantly” comply with renewed US sanctions on its neighbour Iran, which remains heavily involved in Iraqi political affairs.
Prime Minister Haider Al Abadi said late Tuesday that Iraq opposes the embargo, labelling it a “strategic error”.
“We are against sanctions in the region. Blockades and sanctions destroy societies and do not weaken regimes,” he said during a press conference. He believed the sanctions were unjust, he said.
On Monday, Washington re-imposed sanctions on Tehran's trade sector that had been lifted in 2015 under a historic nuclear deal between Iran and the US.
US President Donald Trump unilaterally withdrew from the deal in May, and followed up by renewing sanctions targeting Iran's access to US banknotes and key industries, including cars and carpets.
The sanctions place Mr Al Abadi’s government in a difficult position between its two biggest allies, Washington and Tehran.
Iraq is the second-largest importer of Iranian-made non-hydrocarbon products, buying approximately $6 billion (Dh22.04bn) worth of goods in 2017.
Tehran also supplies electricity to southern Iraq in efforts to deal with chronic power cuts that helped trigger protests in recent weeks.
"We are committed to protecting our people and their interests," the prime minister said.
Recently, private Iranian electricity companies have cut power supplies to Iraq's oil-rich port city of Basra over outstanding payments.
Mr Trump pledged on Tuesday that companies doing business with Iran would be barred from the US.
The sanctions are set to be followed by a second wave on November 5, targeting Tehran's oil and gas sector.
Mr Al Abadi’s statement was backed by Iraqi President Fuad Masum.
"The nature of Iraq's relations with Iran, along with their mutual interests, will make it difficult for Iraq to comply with these decisions," Mr Masum told Iraqi broadcaster Al Hurra.
The president believes that the sanctions will negatively impact not only Iraq but other states that share a border with Iran.
Resentment over US sanctions lingers in Iraq, where the economy was crippled by 12 years of sanctions that began in 1990 after former dictator Saddam Hussein invaded Kuwait.