"Here is part of Cloud's explanation, via The Daily Beast:
Iraqi production has gone from a low of less than two million barrels of oil a day at the height of the war, to almost 3.4 million barrels a day this September. The Iraqis have a target of 4 million barrels a day by 2014, which – given the way things have gone in the last year – they are quite likely to meet and perhaps exceed. The increase of 1.5 m barrels/day that has already occurred neatly matches the decline of about 1.5 m barrels/a day that has occurred in Iranian exports over the last year.
Since the West could always quietly abandon sanctions if things went badly wrong in Iraq, serious sanctions on Iran have gone from being impossible, to being almost costless, as a result of the success of the Iraqi reconstruction program. While the public narrative in American politics casts Iraq as South Vietnam and Iran as North Vietnam, making the Iranians the main beneficiaries of the war, in fact that scary old story has nothing at all to do with Iraq or Iran, and the actual outcome of the war, for the Iranians, has been disaster."