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Iran and Iraq could raise their annual bilateral trade to $20 billion from the current level of $12 billion, President Hassan Rouhani said on Saturday, despite concerns over the economic impact of renewed U.S. sanctions, Reuters reports.

Rouhani’s remarks, made after a meeting with visiting Iraqi President Barham Salih, came about two weeks after the United States restored sanctions targeting Iran’s key oil industry as well as its banking and transportation sectors.

“... through bilateral efforts, we can raise this figure (for bilateral trade) to $20 billion in the near future,” Rouhani said in comments broadcast live on Iranian state television.“We held talks on trade in electricity, gas, petroleum products and activities ... in the field of oil exploration and extraction,” Rouhani said.

Iraqi officials told Reuters last week that Iraq had agreed to sell foodstuffs in return for Iranian gas and energy supplies.

Iranian trade officials denied that any food-for-gas scheme could be set up as Iran was a net exporter of food to Iraq.

“The opposite is correct, since Iran provides foodstuffs to Iraq... We have exported more than $6 billion to Iraq in the past seven months and we could import goods for that amount but not food items,” Yahya Al-e Eshaq, head of the Iran-Iraq chamber of commerce, was quoted as saying by the ILNA news agency.

A spokesman for an association of Iranian gas and petrochemicals exporters said Iraq wanted to pay for the gas imports in its dinar currency, the semi-official ISNA news agency reported.

Baghdad is seeking U.S. approval to allow it to import Iranian gas for its power stations. Iraqi officials say they needs more time to find an alternative source than a 45-day waiver granted to it by the United States.

“It will be important to create free trade zones at our shared border and to connect the two countries’ railways,” Salih said.

“We will not forget your support for the Iraqi people in the fight against (Iraqi dictator) Saddam (Hussein). Neither do we forget Iran’s stand in the recent fight against terrorism,” added Salih, an Iraqi Kurd.

Iran wields wide influence in Iraq, its smaller Arab neighbor, where its Revolutionary Guards played a key role in training and arming the mainly Shi’ite militias that helped defeat Islamic State.

Iraq imports a wide range of goods from Iran, including food, agricultural products, home appliances, air conditioners and spare car parts. The goods element of Iranian imports to Iraq was worth about $6 billion in the 12 months ending March 2018, or about 15 percent of Iraq’s total imports for 2017.

Energy contracts also contribute to the total volume of bilateral trade.

Iraqi central bank officials said in August that their country’s economy was closely linked to non-Arab Iran, which is engaged in several proxy wars with Saudi Arabia in the region.

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