Iraq’s Partnership with Russia Persists Despite International Pressure

On February 6, Russian Foreign Minister Sergei Lavrov met with his Iraqi counterpart Fuad Hussein in Baghdad. During their meeting, Lavrov and Hussein discussed Iraq’s position on the Ukraine War and their mutual concern about the conflict’s secondary impacts, such as food insecurity and energy market instability. The remainder of Lavrov’s trip, which included meetings with Prime Minister Mohammed Shia al-Sudani, President Abdul Latif Rashid and Parliament Speaker Mohammed al-Halbussi, underscored the enduring strength of Russia-Iraq relations, and Iraq’s state INA news agency highlighted Russia as a “partner and friend.”

Due to divided public opinion on Russia’s invasion and the conflict’s secondary economic impacts, Iraq has struck a cautious tone toward the Ukraine War. Russia’s primary objective in Iraq is to ensure that its extensive energy sector investments remain as immune as possible to Western sanctions. This objective has faced serious setbacks in recent months, as payment difficulties and commercial disruptions threaten Russia’s decade-long economic outreach to Iraqi Kurdistan.

A Delicate Balancing Act

Since Russia’s February 2022 invasion of Ukraine, Iraq has refrained from publicly condemning Russia’s aggression. Iraq abstained from a March 2 United Nations General Assembly (UNGA) vote denouncing the invasion, citing Iraq’s “historical background” and “sufferings resulting from the continuing wars against [the country’s] peoples.” Iraq also expressed support for dialogue between the war’s belligerents, and participated in the Arab League Contact Group aimed at ending the war. As the war escalated, Iraq’s UNGA votes eventually came to reflect a stance more critical of Russia’s invasion; it voted to condemn Russia’s annexation of four Ukrainian regions in October 2022 and called upon Russia to leave Ukraine in February 2023. Despite its hardened stance, Iraq’s engagement with Moscow has persisted.

Iraq’s non-alignment in the Ukraine War reflects its desire to balance conflicting internal perspectives on the conflict. On the one hand, Iran-aligned Shia militia groups were some of the most enthusiastic supporters of Russia’s invasion of Ukraine. Days after the invasion, Kataib Hezbollah Secretary General Abu Hussein al-Hamidawi declared that the U.S. forced Russia to launch its invasion, declaring that “it is [in the] interest of the nation and the axis of resistance that the West loses this war in order to ward off their evil from the region.” Sabereen News, an Iran-aligned outlet, hailed the spread of pro-Putin posters in Baghdad.

On the other hand, important Iraqi political figures have refused to support Russian aggression. Moqtada al-Sadr, the leader of the Sadrist movement, sympathized with al-Hamidawi’s view that the U.S. instigated hostilities, but he called the war “absolutely useless” and supported a Russia-Ukraine peace dialogue. Although the Kremlin-backed Donetsk People’s Republic chief Denis Pushilin expressed support for Kurdish self-determination in a March 2022 interview with Rudaw, the president of Kurdistan Region Nechirvan Barzani distanced himself from Russia’s invasion and supported a Turkey-brokered ceasefire.

Iraq’s balancing strategy is undoubtedly linked to its desire to mitigate food insecurity emanating from the Ukraine War. Initially, some Iraqi economists believed that Iraq would suffer less severe food price inflation than other Arab countries. Economist Dargham Mohammad Ali contended that Iraq’s local wheat production and agreements with other major producers, such as Australia, would shield it from the war’s worst effects. Nevertheless, in the first two months of the war, wheat and cooking oil prices in Iraq increased by 20 percent. In response, the Iraqi government began paying farmers a 30 percent premium for wheat and authorizing loans to farmers through Iraq’s Agricultural Bank.

To reverse war-induced supply chain disruptions, Iraq must ensure that it may purchase both Ukrainian and Russian wheat. Iraq has a long history of unofficially importing Ukrainian wheat and repackaging it as local produce, and Baghdad has staved off tensions with Kyiv by denying reports that it purchased smuggled Ukrainian grain. Ukrainian Prime Minister Denys Smyhal has praised Iraq’s support for a political solution to his country’s conflict with Russia, as he hopes that Baghdad will encourage Moscow to comply with the Black Sea grain export deal that allows Ukrainian grain to be sold on global markets. Iraq has also viewed Russia as a potential long-term partner to help the country meet its 4.5-5 million ton per annum wheat supply target. Therefore, Iraq hopes that non-alignment and mediation will prevent it from falling prey to the increased politicization of agricultural exports.

Circumventing Secondary Sanctions

Following the imposition of severe Western sanctions against its hydrocarbon industry, Russia sought to secure the future of its three core energy assets in Iraq: Lukoil in West Qurna-2, Gazprom in Badra, and Rosneft in Iraqi Kurdistan. These energy investments are worth $10 billion—the majority of Russia’s estimated $14 billion investment footprint in Iraq. Initially, Russian officials were outwardly confident about the sustainability of their investments in Iraq. On March 1, 2022, Russian Ambassador to Iraq Elbrus Kutrashev highlighted the high security costs Russian companies pay to do business in Iraq, which could run up to 25 percent of firms’ budgets. These exorbitant outlays often serve as a deterrent for foreign investors. Kutrashev also regarded the large number of Russian nationals residing and working in Iraq as a significant advantage and a continuity from the Soviet era.

Despite the Kremlin’s initial optimism, Iraq’s policies raised doubts about the durability of Russian investments. On March 3, the Iraqi Central Bank urged state institutions to cease business dealings with Russian companies to insulate Iraq’s economy from Western secondary sanctions. Payment difficulties likely caused Rosneft to suspend trade in Kirkuk blend crude, and by June 2022, Dubai-based BGN International supplanted Rosneft in this market. As a result of Western boycott of Russian oil and gas, Iraq immediately received oil purchase requests from European, U.S., and East Asian companies caused it to position itself as a beneficiary from restricted access to Russian energy.

During the second half of 2022, however, Russia saw some success with countering the threat of Western sanctions on its business interests in Iraq. As oil minister, Hayyan Abdul Ghani continued to encourage Lukoil’s exploration and development of the Eridu oil field, which is located 75 miles from Basra. Lukoil’s 75 percent stake in West Qurma-2 also remained secure. In February 2023, Fuad Hussein pledged to speak with the U.S. about Iraq’s ability to pay Russian companies without running afoul of international sanctions. Hussein’s remarks reflected Lavrov’s warning to him that “legal economic relations” needed to be protected from “illegal pressures from the West.”

While Iraq’s energy cooperation with Russia has withstood Western sanctions, its security collaboration with Moscow has weakened significantly. In April 2022, it was widely reported that Shia militias aligned with Tehran facilitated the entry of the Iranian-made Bavar-373 missile system, which resembles the S-300, into Russian territory. These reports have not been subsequently corroborated, however, and Iraq’s pre-war negotiations with Russia on S-300s, S-400s, and Su-57 jets have ceased. Iraq’s primary forum for security cooperation with Russia remains the Quartet Information Exchange and Coordination Center on Syria. Iraqi National Security Advisor Qasim al-Araji participated in this coordination center meeting hours after the Russian invasion of Ukraine.

During the first year of the Ukraine War, Iraq mirrored the approach of other Arab countries, such as Egypt and Jordan, by periodically condemning Russia at the UN while continuing to engage with Moscow on issues of mutual concern. Iraq is likely to continue this approach, even as Russia’s brinkmanship on the Black Sea grain deal imperils Baghdad’s short-term food security and the U.S. pressures Middle Eastern countries to refrain from commercial dealings with Russia. Half a century after the April 1972 Soviet-Iraqi Friendship Treaty, a spirit of camaraderie still lingers between Russia and Iraq, one that will not be effaced by one year of war in Ukraine.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.