"With all our contradictions, Turkey and Iran share a common goal – to extinguish the ethnic conflicts in the region. Our relations are extremely important for peace and stability," Davutoglu said as quoted by Turkey’s NTV broadcaster.
Davutoglu arrived in Tehran for a two-day official visit on Friday, leading a delegation of economy, customs, trade, energy and other ministers. He is due to meet Iranian President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif.
"Even before the lifting of the sanctions, we planned to achieve turnover of $30 billion a year, but now we can go even further," Davutoglu stressed, noting plans to expand energy, transport and tourism cooperation.
Iran has exported 10 billion cubic meters of natural gas per year since 2001 to Turkey, second in volume to Russia.
Despite economic ties, Turkey and Iran remain at odds over the Syrian conflict and support for its government.