The Central Bank of Iraq has prohibited all Iraqi banks from conducting business with Iran in US dollars.
Iraq shares a 1,500km border with Iran; goods and people cross daily.
Iran is Iraq’s second-largest trading partner, exporting everything from fruits and vegetables to fuel and home furnishings.
For a decade, Iran has also provided electricity Iraqi border towns.
Merchants are unsure how to conduct business in the unpredictable climate caused by the new US sanctions and with no guidance coming from their government, they no idea what will happen next.
Al Jazeera’s Natasha Ghoneim reports from the border district of Penjwen in Iraq.