In Donald Trump’s recent pronouncement regarding Iran’s nuclear program and its alleged breaching of the JCPOA, he made the following remark:
“In a few moments, I will sign a presidential memorandum to begin reinstating U.S. nuclear sanctions on the Iranian regime. We will be instituting the highest level of economic sanction. Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States.” (my bold)
This statement could easily be subject to a wide variety of interpretations, for example, any nation that does any trade with Iran of any kind could be deemed by Washington as aiding Iran’s economy which could ultimately assist Iran in its supposed nuclear quest. As such, let’s take a look at a side of Iran that we rarely hear about, Iran’s imports, exports and its major trading partners.
According to the Observatory of Economic Complexity (OEC) at MIT, Iran has the 60th largest export economy in the world with exports of $31.8 billion and imports of $43.9 billion in 2015, resulting in a trade deficit of $12.2 billion. Here is a list of the top Iranian exports, their value in U.S. dollars and the percentage that each product represents of total exports:
1.) Crude Petroleum – $18.3 billion – 58 percent
2.) Ethylene Polymers – $2.4 billion – 7.5 percent
3.) Acyclic Alcohols – 1.27 billion – 4 percent
4.) Other Nuts – $830 million – 2.6 percent
5.) Peat – $694 million – 2.2 percent
6.) Iron Ore – $583 million – 1.8 percent
7.) Refined Petroleum – $499 million – 1.6 percent
1.) Cars – $1.47 billion – 3.3 percent
2.) Corn – $936 million – 2.1 percent
3.) Vehicle Parts – $932 million – 2.1 percent
4.) Jewellery – $885 million – 2.0 percent
5.) Flat-rolled Steel – $860 million – 2.0 percent
6.) Rice – $782 million – 1.8 percent
7.) Wheat – $685 million – 1.6 percent
Iran also imports a very significant volume of medical equipment and medications; in 2015, the nation imported a total of $1.095 billion worth of both categories.
Now, with Donald Trump’s comments about “helping Iran” in mind, here is a graphic showing Iran’s major export destinations and the percentage of total exports that each destination represents:
Here is a graphic showing Iran’s major import origins and the percentage of total imports that each origin represents:
China and Iran are very significant trading partners; according to Tansim, a private Iranian news agency, Iran is the top exporter of goods to China among all Middle Eastern nations. Data released by the Chinese Customs Administration showed that China’s trade exchange with Iran in 2017 rose by 19 percent on a year-over-year basis, reaching $37.18 billion. In 2017, China’s exports to Iran were $18.599 billion (up 13.3 percent on a year-over-year basis) and China imported $18.579 billion worth of goods from Iran (up 25 percent on a year-over-year basis). As well, according to Shana, Iran’s PetroEnergy Information Network, Iran exported 777 million barrels of crude oil in 2017 (an average of 2.13 million BOPD) and 180 million barrels of gas condensate (an average of 490,000 BOPD). Of the total, 62 percent was headed to Asia with China and India being the biggest consumers of Iranian oil along with South Korea, Japan, Turkey, Italy, the United Kingdom, Hungary and the Netherlands. Iran’s Iranian Offshore Engineering and Construction Company has also recently signed letters of intent worth between $400 million and $500 million with foreign companies to exploit Iran’s massive natural gas and oil reserves as shown here:
“The UK, like its European allies will stay committed to the JCPOA,” Keith Wellings, director of the Department for International Trade of the UK embassy in Tehran, said on Wednesday, referring to the official appellation of the agreement – Joint Comprehensive Plan of Action (JCPOA).
He said as some of the advantages of the nuclear deal, the UK government would be keen on encouraging British firms to work in Iran.” (my bold)
It is quite apparent that the United States is, at least for the time being, standing alone when it comes to abandoning the Joint Comprehensive Plan of Action. From the information that I have shared in this posting, it is quite possible that the Trump Administration’s threat to take action against any nation that it deems to be assisting Iran’s nuclear ambition could be yet another jab at Iran’s major two-way trading partner, China. As is becoming apparent, Washington’s announcement on Iran is yet another decision without a plan, a problem that will become apparent as the world’s powers absorb the implications of trading with Iran.
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