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U.S. Sanctions Reduced Iran’s Trade With EU And Other Countires

File Photo In this Thursday, July 16, 2015 photo, Iranians look at a Renault sedan at a dealership in northern Tehran, Iran.
File Photo In this Thursday, July 16, 2015 photo, Iranians look at a Renault sedan at a dealership in northern Tehran, Iran.

Iran-EU trade turnover has declined significantly since the United States reimposed stringent sanctions on Iran, including oil exports and banking.

According to official statistics, released by Iran’s Trade Promotion Organization, European Union’s exports to the country declined 19% year-on-year to $6.792 billion during nine months of current Iranian fiscal year, which started on March 21, 2018.

Iran’s non-oil exports to EU also shrank 19% to $868 million.

U.S. withdrew from the nuclear deal with Iran in May 2018 and imposed financial and oil sanctions on the country in August and November respectively. Iran’s exports to US plunged to zero in October-September 2018, but the country’s imports from US indicate a huge jump.

From March 21 to December 21, Iran’s total non-oil exports increased 5.4% year-on-year to $33.36 billion, but in the ninth month (November 22-December 21) it only exported $1.87 billion, less than half of Iran’s monthly average during the preceding eight months.

Despite export growth, Iran has fulfilled only three-fourths of its non-oil export target for the period.

Its imports have also declined 16% year-on-year to $32.62 billion, the Trade Promotion Organization says

Iran’s top trade partners during March 21-December 22
ImporterValue ($ MillionY/Y changeExporterValue ($ Million)Y/Y change
UAE5,13411%South Korea1,832-33%
South Korea853-73%Russia94374%

Meaningful trends in Iran’s foreign non-oil trade

As imports from EU declined, Russia boosted exports to Iran by 74%. Iranian exports to Russia also increased by 9% to $193 million.

Iraq became Iran’s top export target, but the Islamic Republic’s exports to Iraq plunged to a fifth of the previous eight months average (March 21-November 21) during the ninth month. Iran exported only $172 million to Iraq during November 22-December 21.

The details of statistics show that Iran’s exports to United Arab Emirates (UAE) during November 22-December 21 declined to only $42 million, while the average exports during March 21- November 21 was $642 million per month.

Both United Arab Emirate (UAE) and Oman re-export other countries’ goods to Iran or from Iran to other countries.

UAE is one of closest allies of Iran’s rival, Saudi Arabia, while Oman traditionally has good relations with Iran. The statistics show that Iran’s imports from Oman increased 282% to $397 million in nine months, while its imports from UAE declined 29%. Though Iran’s exports to UAE increased by 11%, its exports to Oman rose 49% to $529 million.

Oman agreed in October 2018 to provide exclusive access to its Suwayq port to Iran.

Abdullah al-Saleh, undersecretary for foreign trade and industry of UAE told Reuters in

November that the United Arab Emirates is fully complying with sanctions imposed by the United States on Iran even though it will mean a further drop in trade with Tehran.

UAE was also one of biggest clients for Iranian gas condensate (ultra-light crude oil, which Iran includes it in non-oil export basket), purchasing about 100,000 b/d. But, the country stopped Iranian gas condensate imports due to U.S. sanctions. It is expected that Iran’s non-oil exports to this country declines further in coming months.

Like Iraq, Afghanistan is also a neighbor the Islamic Republic where it has been trying hard to expand its political, security and economic influence. Trade figures show that Iran’s exports to Afghanistan during November 22-December 21 declined to just $93 million, while the average exports during the March 21- November 21 was above $280 million per month.

All of Iran’s top exports goods consist of raw or semi-raw hydrocarbons, like gas condensate, propane, butane, methanol, etc. Agricultural products, automotive and machinery parts also stand at the top of Iran’s imported goods during the nine months of its current fiscal year.