In recent decades, Iran-Iraq economic relations have faced numerous challenges and limitations despite cultural, religious, and historical commonalities. Research findings indicate that Iran's internal challenges—including international sanctions, banking restrictions, a weak private sector, a state-dominated economy, the lack of a coherent strategy, and the dominance of security-political perspectives over the economy—have played a significant role in Iran's economic setbacks. However, opportunities such as a long land border, Iraq's need for energy, technical and engineering services, and infrastructure reconstruction, a vast consumer market, Iran's role in supplying electricity and gas, and the capacity for pilgrimage diplomacy and religious tourism exist. By adopting an economy-centered approach rather than a policy-centered one, Iran can establish a sustainable and effective economic presence in Iraq. The article emphasizes the necessity of strengthening economic diplomacy, providing genuine support to the private sector, improving the quality of export goods, establishing alternative financial mechanisms, and cooperating with Iraqi investors, demonstrating that these measures can mitigate past failures and maximize the exploitation of opportunities.