“The plans to export electricity and gas and hopefully oil continue and we are ready to expand these contacts not only for the two countries but also for other countries in the region,” Rouhani said after a meeting with visiting Iraqi Prime Minister Adel Abdul Mahdi.
In March, the United States granted Iraq a 90-day waiver exempting it from sanctions to buy energy from Iran, the latest extension allowing Baghdad to keep purchasing electricity from its neighbor.
“We hope that our plans to expand trade volume to $20 billion will be realized within few months or years,” Rouhani said. Iranian media reports have put the current level of trade at about $12 billion.
Rouhani expressed hope that work on building a railway linking the two countries, would begin within the next few months.
The railway project was part of deals reached during Rouhani’s March visit to Baghdad, meant to underline that Iran still plays an important role in Iraq despite US efforts to isolate Tehran.
US President Donald Trump reimposed sanctions on Iran’s energy exports in November, citing its nuclear program and activities in the Middle East, but has granted waivers to several buyers to meet consumer energy needs.
With a 1,400-kilometer-long joint border, Iraq has turned into a strategic ally and an important trade partner for Iran in recent years.
Iraq's huge energy reserves and a large, diverse market bestow it a special place in the economic equations of the region.
Until two years ago, Iran was Iraq's third biggest trade partner after Turkey and China, but it vaulted to the top place last year with a record $9 billion worth of exports.
Iraq relies heavily on Iranian gas to feed its power stations, importing roughly 1.5 billion standard cubic feet per day via pipelines in the south and east.
For their run-of-the-mill sustenance, Iraqis also depend on Iran for everything from food to machinery, fruits and vegetables.
A remarkable feature of this close relationship is that much of the blossoming has occurred either in the run-up or after the reimposition of draconian US sanctions on Iran.
Rouhani also hailed the high level of security along the Iran-Iraq border.
“Today, we are witnessing very good security along the two countries’ borders,” Rouhani said.
“The promotion of Iran-Iraq relations has always been in the interests of both nations and aimed at establishing peace, stability, and security in the region…,” he said.
Rouhani further emphasized that negotiations between the two countries reflect the willingness of their officials to develop and deepen bilateral relations.
He also expressed hope that with the efforts of the officials, agreements reached between Tehran and Baghdad in different fields would become operational as soon as possible.
The Iraqi premier described a recent decision by the two countries on a free of charge visa regime as “positive” and expressed hope that with the removal of visa requirements, closer relations would develop between merchants, economic activists, and students of both countries.
Reuters, Press TV and Tasnim contributed to this story.