Iranian President Hassan Rouhani addresses the Nelson Mandela Peace Summit September 24, 2018, one day before the start of General Debate of the 73rd session of the General Assembly at the United Nations in New York.

Iranian President Hassan Rouhani said on Saturday Iran and Iraq could raise annual bilateral trade to $20 billion from the current level of $12 billion.

Rouhani's remarks, in 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.

"Today, the economic relations between the two countries reach about $12 billion (per year) and, through bilateral efforts, we can raise this figure to $20 billion," Rouhani said in remarks broadcast live on Iran's state television.

Iraqi officials told Reuters last week that Iraq has agreed with Iran to exchange Iraqi food items for Iranian gas and energy supplies.

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

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 about $6 billion for the 12 months ending March 2018, about 15 percent of Iraq's total imports for 2017.

There are also energy contracts between the two countries contributing to a volume of trade of $12 billion last year.