According to Arab-Africa director of Iran’s Trade Promotion Organization Farzad Piltan, trade with the UAE, Oman, Qatar, Kuwait, Jordan and Bahrain which are in the US orbit plus Iraq, Lebanon and Syria which are close to Iran stood at $22 billion in the last Persian year which ended March 21.
Iran exported $12.5 billion of goods to the countries and imported about $9 billion from them in the period, Piltan told IRNA news agency.
Among the countries, Iraq was the top destination for Iranian goods and products worth $9 billion. The UAE came next with $2.5 billion worth of imports from Iran ahead of Oman with $450 million.
Iran also exported $200 million of goods to Qatar, $180 million to Kuwait, $160 million to Syria, $30 million to Lebanon, $21 million to Jordan and $10 million to Bahrain which has an uneasy relationship with the Islamic Republic.
The UAE was the biggest exporter to Iran with $8.7 billion, dwarfing the next export nations, Oman with $167 million and Iraq with $131 million.
The unilateral US sanctions on the Islamic Republic have seen trade with the biggest partners witness massive drops, but commercial ties with some of them are still significant.
Complicated close ties with UAE
For example, the United Arab Emirates remains one of Iran’s biggest trading partners despite Abu Dhabi’s hostile foreign policy posture against the country and US sanctions against Tehran.
This is because the two neighbors across the Persian Gulf have traditionally been dependent on each other for vast sums of trade.
The UAE and Iran have long had a special relationship, unusual even in the Arab world. A quarter of the citizens of the Emirates trace their roots to Iran.
During the former Iraqi dictator Saddam Hussein’s war on Iran in the 1980s, Dubai became a crucial transshipment point for goods and supplies to the Islamic Republic as the late UAE president, Sheik Zayed bin Sultan al-Nahyan, argued for a more balanced relationship than that of the policies pushed by the United States.
Dubai, where home for Iranians is only a 45-minute flight across the Persian Gulf, hosted until recently one of the largest Iranian communities outside Iran, estimated at more than 400,000 who controlled some $300 billion in assets, if not more.
New figures are scant, putting the number of Iranians still living in the UAE somehow above or below 100,000.
Thousands of Iranians have invested in real estate, started businesses and opened second homes, turning the desert country into an Iranian business hub.
The current de facto leader of the UAE, Abu Dhabi’s crown prince Mohammed bin Zayed, however, is a hawk on Iran. He was one of the few rulers to welcome President Donald Trump’s decision to withdraw from the 2015 nuclear accord with Tehran.
The complex relationship between Iran and the UAE is due to the individual dynamics of the seven emirates. Iran has a long history of trade and travel –particularly with the northern emirates of Sharjah, Ras Al Khaimah and Dubai.
Abu Dhabi, however, has long taken a more hawkish anti-Iranian posture, also supporting Riyadh after 2016 protests outside the Saudi embassy in Tehran and downgrading diplomatic ties.
The position has in turn impacted trade relationship, undermining Dubai’s role as a traditional hub for Iran-linked businesses.
Last year, UAE officials had projected trade with Iran to plummet by half from $19 billion in 2018, but Piltan’s figure of $11.2 billion in bilateral trade shows commercial ties have fared better than expected.
That is an important indicator of how businesses in the UAE are generally adamant not to lose Iran as a massive market despite their government complying stringently with the US sanctions.
That, of course, comes with risks. In March, the United States imposed sanctions on five UAE-based companies, accusing them of having purchased hundreds of thousands of tons of petroleum products from Iran.
However, the cost of the compliance with the sanctions has hit across the board. The plunge in Iranian trade comes at a time when the UAE is grappling with several years of lackluster growth triggered by subdued oil prices and rising living costs.
Iraq, a trade stronghold
Iraq is another major trade partner of Iran, much to the chagrin of the United States which is trying to pry Baghdad away from Tehran’s.
The Arab country relies on Iran for trade and natural gas that generates as much as 45% of its electricity.
Last week, Iraqi officials said the US had again granted Iraq a month-long sanctions waiver enabling the government to continue importing gas and electricity from Iran.
For their run-of-the-mill sustenance, Iraqis depend on Iranian companies for many things from food to machinery, electricity, natural gas, fruits and vegetables.
Even Washington’s most compliant allies have kept a significant semblance of trade with Iran.
Imports from Europe
Trade with Europe has plummeted under the American sanctions. Nevertheless, Iran was still importing about 365 million euros ($406 million) worth of goods a month from the EU as of October 2019, according to the Wall Street Journal.
EU exports to Iran are mainly machinery, transport equipment, chemicals and manufactured goods. In 2017, the European Union exported over 10.8 billion euros worth of goods to Iran.
The bloc has said it wanted to maintain ties with Iran, but it has struggled to come up with mechanisms to keep trade open as banks and companies refuse to do business with the Islamic Republic because they fear punitive US measures.