Iranian vendors rely on Basra markets to survive US sanctions

Cross-border trade from Iran to Iraq becomes a vital economic lifeline as sanctions crush livelihoods.

An Iranian woman vendor counts Iraqi dinars at the old market in Basra, southern Iraq, on March 28, 2025. Photo by Hussein Faleh/AFP

By Anna Fadiah and Hayu Andini

Every Friday, Iranian vendors rely on Basra markets to survive US sanctions, making a weekly trek across the Chalamja border from Iran into Iraq. They carry bags of produce, crates of household essentials, and, most importantly, hope—hope for a few dollars more than what they could earn at home, where soaring inflation and a plummeting currency have left many with little to survive on.

Alawi, 36, is one of these vendors. He has been crossing the border for seven years now, traveling hundreds of kilometers to reach the bustling souks of Basra. He brings goods like okra in summer and dates in winter. "The situation is difficult due to the embargo," he said, referring to Western sanctions. Fearing consequences back home, he asked that only his first name be used.

He tried to make it work in Iran, he said, but found no buyers for his produce. "The products would spoil, so we had to throw them away and end up losing money," he said. Now, he earns between $30 and $50 a day in Iraq, which he says stretches far further when converted into Iranian rials. "We can spend it in five days or even a week," Alawi explained, a note of reluctant gratitude in his voice.

Impact of US sanctions on Iran’s economy

Iran’s economy was already strained, but the situation deteriorated significantly after former US President Donald Trump withdrew from the Iran nuclear deal in 2018 and reimposed sweeping sanctions. The Iranian rial has since lost much of its value, and the inflation rate has skyrocketed. Official data shows that prices increased by more than 32 percent in March compared to the previous year.

Unemployment has also spiked. For families across Iran, putting food on the table has become a daily struggle. Basic necessities have become unaffordable. For many, the informal economy is now the only option, and crossing into Iraq has become a lifeline.

Trump’s announcement this week of new negotiations with Iran in Oman has sparked a glimmer of hope. Iranian Foreign Minister Abbas Araghchi has reiterated that the main goal remains the lifting of sanctions. But until anything changes, people like Alawi and Milad—just 17 years old—will keep crossing into Iraq to survive.

Basra as a haven for Iranian vendors

The streets of Basra tell the story of this economic migration. On Fridays, its markets fill with Iranian sellers. Piles of rice bags sit beside bottles of cooking oil, cleaning products, and other essentials. Some vendors, exhausted from their journey, nap beside their goods. Others, like Milad and his mother, have decided to set up shop permanently.

Milad’s family started selling household items in Basra two years ago. "In Iran, finding work is hard, and the currency is weak," he said. His cousin has been unemployed since graduating. The family recently rented a small storefront, taking a gamble on the relative economic stability in Iraq.

They are not alone. Thousands of Iranian families are making similar moves, desperate for anything resembling financial security. For some, it's the only way to survive.

A cultural and economic connection across borders

Basra’s close proximity to Iran’s Khuzestan province makes it an ideal location for cross-border trade. Many in Khuzestan speak Arabic and share cultural ties with Iraq, easing the social dynamics for Iranian vendors. According to Hayder al-Shakeri, a researcher at Chatham House, the informal trade between the two countries has grown rapidly over the last decade.

He describes the cross-border commerce as "a vital lifeline." Earning in Iraqi dinars—or occasionally in U.S. dollars—gives Iranian families a cushion against their rapidly depreciating currency. For many working-class Iranians, Basra offers a rare chance to support their families with dignity.

But it’s not without challenges. Some local Iraqi vendors view the Iranian sellers as unwelcome competition, and there are occasional crackdowns by security forces. Vendors are sometimes removed from market stalls, though most return within days.

Harsh conditions at the border

Umm Mansur, a 47-year-old mother of five, joined the ranks of Iranian vendors just six months ago. Her experience has been harrowing. “At the border, they insult and mistreat us,” she said. She describes long waits, harsh treatment, and humiliation. But despite the adversity, she continues her weekly crossings. The reason is simple: in Iraq, she can earn four times what she could in Iran.

"In Iran, there is no way to make a living," she said with quiet resolve.

Her story echoes that of countless other women, elderly men, and even children who have taken up the same journey—trading comfort for opportunity, and sometimes dignity for survival.

Iraqi customers welcome the affordability

Despite the friction with local vendors, many Iraqi customers appreciate the affordable goods brought in by their Iranian neighbors. Abu Ahmad, a 55-year-old math professor in Basra, visits the market every Friday. "Their geymar is better than ours," he said, referring to a rich cream popular at breakfast. "And it’s cheaper. They sell it for 12,000 dinars ($8) compared to 16,000 here."

The price differences are not small. For Iraqi consumers, especially those struggling financially, the influx of Iranian goods can make a real difference. At a time when global inflation is pushing food and fuel prices higher, every dinar counts.

A fragile yet persistent trade

While sanctions continue to choke Iran’s formal economy, the informal trade route through Basra is growing more entrenched. Vendors, aware of the risks and humiliations, return week after week because they must. It is survival, not choice, that drives them.

Shakeri from Chatham House warns that this fragile system depends on many variables: border politics, diplomatic relations, and the shifting winds of local enforcement. Still, he believes the resilience of these traders speaks volumes. “They’ve built a shadow economy that sustains families and communities,” he said.

As long as the sanctions remain, and Iran’s economy continues its freefall, the Friday ritual at the Chalamja crossing will endure. Iranian vendors will keep bringing rice, dates, eggs, and cream. And they will keep hoping for a day when they no longer need to.