Asian trade flourishes for sanctions-hit Iran

Grappling with United States and European Union sanctions that have become progressively tougher over the past 18 months, Iran is increasingly turning to Asia — in particular to China, now its top trading partner.

“Our exchanges with Europe, which used to account for 90% of our trade, now represent only $23 to $24-billion of our $200-billion in trade,” President Mahmoud Ahmadinejad said after the EU ratcheted up sanctions on Iran in January.

These sanctions, which aim to pressure Tehran to halt its nuclear activities, “have not shrunk the world for us”.

Iran is expected to have exported $100-billion worth of oil and $45-billion of non-oil products over its calendar year, which ends mid-March. Its total imports over the same period will touch around $55-billion, according to official forecasts.

“The sanctions, like those previously, will let us cut all economic links with the West,” the number two officer in Iran’s elite Revolutionary Guards, General Hossein Salami, said last month. The force is one of the primary targets of the sanctions.

The EU, which is imposing a boycott of Iranian oil, had been its second biggest importer after China, accounting for around 20% of the crude the Islamic republic sells abroad.

Iran exports more than 70% of its oil to Asian markets, in particular China, India, Japan and South Korea.

China and India alone buy 40% of Iranian oil exports. They are resisting the Western sanctions, saying they will observe only UN measures, not unilateral ones.

Iran-China trade jumped more than 50% between 2010 and 2011, to $45-billion. The two countries plan for it to grow further, to $100-billion by 2015.

Exchanges with South Korea grew 61% in 2011, to $18.5-billion.

However, trade with the United Arab Emirates, a traditional partner that lies just across the Gulf and which has long been a re-exporting hub for European, US and Asian goods to Iran, has slipped as US financial sanctions bite. UAE imports now represent only a third of Iranian imports.

While the US and EU sanctions make it more difficult for Iran to pay for euro- and dollar-denominated goods, and for it to receive petro-dollars, business with Asian customers has an advantage.

“Letters of credit are now being opened in Chinese yuan, Russian rubles, Emirati dirhams and Turkish lira, which are forcing importers to buy their products in those countries,” said one Iranian businessman on condition of anonymity.

“Western financial sanctions are going to reinforce trade links with Asian countries, Russia and Turkey,” he said.

A European diplomat in Tehran said late last year that “in 1995, when the Americans imposed their unilateral sanctions on Iran, they in fact boosted trade between Iran and Europe.

“Today, with the European sanctions, we are going to give a boost to Asian companies.” — AFP

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Muddying the waters in the Musina Makhado economic zone

The public participation process on the environmental impact assessment for the area’s special economic zone has been shambolic

How US foreign policy under Donald Trump has affected Africa

Lesotho has been used as a microcosm in this article to reflect how the foreign policy has affected Africa

We should not ignore Guinea’s constitutional coup

Citizens have for a year protested against the president seeking a third term in office despite a two-term limit. Many have been killed — and 90 more people died in this week’s crackdown

‘Pro-family’ campaigners ignore pregnant women dying during Covid lockdowns

Conservative groups are fighting efforts to expand African women’s access to healthcare. Do they care about women all the time, or only when they’re procreating?

Australian journalists flee China fearing arrest

Their dramatic overnight exit came following days of secret wrangling that had seen both men holed up in Australia's diplomatic missions to escape the clutches of China's feared security police

Where do Africans study abroad?

China is becoming the preferred destination for countries such as Ghana and Nigeria

Subscribers only

Free State branches gun for Ace

Parts of the provincial ANC will target their former premier, Magashule, and the Free State PEC in a rolling mass action campaign

SAA bailout raises more questions

As the government continues to grapple with the troubles facing the airline, it would do well to keep on eye on the impending Denel implosion

More top stories

Hawks swoop down with more arrests in R1.4-billion corruption blitz

The spate of arrests for corruption continues apace in Gauteng and the Eastern Cape.

Catholic NGO boss accused of racism and abuse in Sudan

The aid worker allegedly called his security guard a ‘slave’

Agrizzi too ill to be treated at Bara?

The alleged crook’s “health emergency” — if that is what it is — shows up the flaws, either in our health system or in our leadership as a whole

SANDF hid R200m expenditure on ‘Covid’ drug it can’t use

Military health officials are puzzled by the defence department importing a drug that has not been approved for treating coronavirus symptoms from Cuba

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday