by Sara Vakhshouri
In the last week of April, the US Energy Department issued a report showing that Iran’s crude oil and condensate exports have dropped to their lowest level in the past 26 years. The Energy Information Administration (EIA) estimates that Iran’s net oil export revenue in 2012 was $69 [...]]]>
by Sara Vakhshouri
In the last week of April, the US Energy Department issued a report showing that Iran’s crude oil and condensate exports have dropped to their lowest level in the past 26 years. The Energy Information Administration (EIA) estimates that Iran’s net oil export revenue in 2012 was $69 billion, down from $95 billion in 2011.
In 2012, the average export of crude oil and condensate declined to around 40 percent, from 2.5 million barrels a day (mb/d) in 2011 to about 1.5 mb/d in 2012. Due to the substantial drop in exports and a lack of sufficient storage capacity, the EIA estimates that Iran had to reduce 17 percent of its crude oil and condensate production. Iran was, on average, the second largest producer of OPEC in 2012. But for some months, its production fell below Iraqi levels for the first time since 1989, moving it from second to third place.
This dramatic drop in oil production and exports are the result of the US and EU sanctions implemented since late 2011 that targeted Iranian oil income, which makes up 80 percent of Iran’s total export earnings and about 60 percent of the government’s revenue.
The new sanctions ban European insurance companies from offering any coverage to refineries that process Iranian crude oil. Although a tight market combined with higher prices has made up for some of Iran’s income losses, it is believed that these sanctions have hurt Iranian oil exports in an unprecedented and significant way.
The new sanctions also present a major challenge for Iran to sell its oil to major customers, particularly India, Japan and South Korea. According to the US Energy Department, Iran’s crude oil export to India and South Korea is particularly going to be influenced by these sanctions as their refineries rely mainly on European insurance companies. Previously, Iran could skirt the EU ban on insurance by offering its domestic insurance. But the new sanctions make this impossible. This means Tehran is going to have an even harder time marketing and selling its crude oil: its major customers have to start searching for alternative supplies in the market.
The refinery overhaul season is also going to make it harder for Iran to sell its oil. The second quarter of each year is the period for maintenance overhaul for refineries in the Northern Hemisphere that results in a seasonal decline in demand. It is expected that the spike in Iranian crude oil from the last quarter of 2012 will drop once again due to the new EU restrictions on refinery insurance and seasonal demand.
It is not expected that Iranian crude oil production will rise soon. According to the EIA report, Iran’s oil production in 2012 was around 700 thousand b/d, lower than in 2011. The natural production decline of Iran’s matured fields is playing a major role in curbing its crude oil production. Iran needs to invest in its oil fields in order to maintain its production but the large scale of prohibitions on investments in the country’s oil and gas fields imposed by the US and EU prevents any further increase of the country’s production.
]]>by Usha Sahay
As Iran expands its nuclear infrastructure and North Korea issues increasingly hostile threats, analysts continue to expend much energy trying to figure out what military capabilities the two main “nuclear outliers” have. One is certain: Iran and North Korea have an outsized ability [...]]]>
by Usha Sahay
As Iran expands its nuclear infrastructure and North Korea issues increasingly hostile threats, analysts continue to expend much energy trying to figure out what military capabilities the two main “nuclear outliers” have. One is certain: Iran and North Korea have an outsized ability to influence debates about US defense policy. In March, the US decided to expand its missile defenses in Alaska to counter a potential North Korean ballistic missile attack. The threat from Iran has similarly driven US missile defense planning, arms sales and other policy decisions. North Korea and Iran have also become highly politicized components of our national security discourse. For instance, Republican Senators Bob Corker and Jim Inhofe recently cited the countries as reasons to oppose President Obama’s desire to reduce US and Russian nuclear stockpiles and instead increase funding for modernizing our nuclear arsenal.
Often mentioned in a single breath, the threats from Tehran and Pyongyang are important shapers of national security decisions in Washington. So it’s worth asking: do Iran and North Korea pose the same type of danger? Is one of more concern than the other? And how should the US deal with these countries, which pose the most acute challenges to the global nonproliferation regime?
Iran and North Korea share some important characteristics: both are ruled by authoritarian regimes, both have issued worrisome threats to neighbors that are US allies and both have remained intransigent despite harsh international condemnation and strict sanctions.
Still, from a purely capabilities-based standpoint, the countries shouldn’t technically be grouped in the same category for one very obvious reason: North Korea has a nuclear arsenal and Iran does not.
North Korea conducted its first nuclear test in 2006 and it has enough plutonium for 4-8 nuclear weapons. Iran, for its part, may be interested in something more than peaceful nuclear energy, but it has refrained from enriching uranium to weapons-grade levels and from acquiring enough fissile material for a nuclear bomb. Moreover, while neither nation can hit the US with inter-continental ballistic missiles, North Korea’s missiles can reach farther than Iran’s (in fact, there’s some evidence that Iran has had to pause its ballistic missile program due to difficulties imposed by economic sanctions).
In terms of US policy options, North Korea’s nuclear weapons constrain our actions in a way that isn’t applicable with Iran. While many have given serious consideration to a military strike on Iran, few consider attacking North Korea a good idea because of its nuclear weapons and the significant conventional military threat it poses to South Korea. Taking out an existing nuclear arsenal is a tall order, and in North Korea’s case, a strike would be incredibly difficult since we couldn’t even be sure where our targets were.
In this regard, the North Korean and Iranian cases are similar. Iran doesn’t have a nuclear arsenal, but a military strike on the country would be a disaster. Iran would surely retaliate against Israeli and US targets. The confrontation could escalate into a destabilizing regional war in the already volatile Middle East — and all this without any guarantee that Iran couldn’t simply rebuild its nuclear facilities a few years later. Worst of all, premature military action would breed resentment and insecurity in Iran, which would probably compel its government to embark on a full-scale nuclear weapons program — a decision that has not yet been made.
This brings us to the crucial difference between Iran and North Korea: with Iran, the United States has a unique opportunity to solve the problem before it becomes a greater crisis. Iran still hasn’t committed to going nuclear, which offers a chance to prevent it from following North Korea’s path. The reason for cautious optimism is that, unlike the North Korean “hermit kingdom”, Iran is integrated into the global economy and dependent on international trade. So, economic sanctions should give us far more leverage with Iran than they have with North Korea. (Sanctions expert Etel Solingen makes a distinction between “inward facing” and “outward facing” governments, arguing that the latter are more interested in ties with the international community and therefore more likely to be swayed by sanctions. In many ways, Iran is inward-facing, but certainly much less so than North Korea).
Relatedly, although Iran is far from a liberal democracy, its system is more open than North Korea’s and its leaders are much more accountable to the public. Iran analyst Alireza Nader recently suggested that the government in Tehran is more responsive to economic pressure, pointing out that “North Korea has suffered from sanctions, but its regime does not care about its population the way the Islamic Republic has to consider its population.”
All of this means that the US can still use its considerable diplomatic leverage to avoid being forced to choose between a military conflict and living with an Iran with expanded nuclear capabilities.
To be sure, dissuading Iran from its nuclear ambitions won’t be easy. Thus far, negotiations have yielded little except frustration. But this isn’t because Iran is a lost cause with which we’ve run out of options. Rather, talks have largely foundered because both sides have yet to commit to the flexibility and trust-building needed to broker an agreement. With Iran, more so than with North Korea, the foundation is in place to reach a compromise — all that’s needed is the political will to get there.
North Korea and Iran pose tough foreign policy challenges, and in both cases, the available options are few and far from ideal. But with Iran, continued negotiations offer an opportunity to stop a still-nascent nuclear program and prevent a nuclear breakout that would destabilize the region and threaten the credibility of the global nonproliferation regime. As we look for ways to deal with two difficult “outlier” states, that’s one opportunity we shouldn’t fail to seize.
– Usha Sahay is a Herbert Scoville, Jr. Peace Fellow at the Center for Arms Control and Non-Proliferation in Washington, DC, where she studies US nuclear policy, with a focus on US-Iran relations and global nonproliferation efforts. She is a recent graduate of Columbia University.
Photo: Iranian President Mahmoud Ahmadinejad meets with North Korea’s ceremonial head of state, Kim Yong-nam in September 2012. [AFP]
]]>By Richard Javad Heydarian
A key foreign policy consequence of President Barak Obama’s reelection is the growing possibility of face-to-face talks between the United States. and Iran. Both the US Secretary of State Hillary Clinton and Iran’s Foreign Minister Ali Akbar Salehi have expressed, albeit conditionally, their respective governments’ openness [...]]]>
By Richard Javad Heydarian
A key foreign policy consequence of President Barak Obama’s reelection is the growing possibility of face-to-face talks between the United States. and Iran. Both the US Secretary of State Hillary Clinton and Iran’s Foreign Minister Ali Akbar Salehi have expressed, albeit conditionally, their respective governments’ openness to engage in comprehensive bilateral talks — for the first time in almost three decades — to primarily resolve the ongoing nuclear standoff.
Beyond the issue of urgently resolving the Iranian nuclear question, purportedly to prevent an Israeli pre-emptive strike and an Iranian nuclear bomb, the Obama administration’s growing interest in directly engaging Iran may have something to do with timing, opportunity, and leverage.
There is a feeling in Washington that the recent transatlantic sanctions may have created enough pressure — and damage to Iran’s economy — to potentially extract major unilateral concessions from the Iranian regime. Namely, a “stop-shut-ship scenario”, whereby Iran would curb its enrichment capacity, open up all aspects of its nuclear program, shut down its heavily-fortified nuclear facilities, and ship out its stockpile of above 3-5 percent enriched uranium in exchange for some nominal — yet to be clarified — incentives from the West.
Since the imposition of Western sanctions against Iran, beginning in late-2011 and intensifying by mid-2012, the Iranian economy has begun whimpering on an unprecedented scale. Iran’s oil output is at its lowest in more than two decades, while oil exports have been halved; the inflation rate has surpassed the 25 percent barrier, while the budget-deficit is reaching its highest level in the last decade; and, the Iranian currency (rial) has lost about 80 percent of its value in less than a year. The sanctions against Iran’s ports, shipping industry, financial sectors, and central bank, Bank-e-Markazi, have also made it increasingly difficult to conduct even the most benign kind of international transactions, from the import of medicines, to food, diapers and medical equipments.
However, there are some recent indications that Iran’s economy is not exactly in a desperate shape, or at least not as frail and fragile as the Obama administrations hopes it to be.
According to the Paris-based International Energy Agency’s (IEA) most recent report, Iran’s oil exports have rebounded sharply – by around 30 percent – after seven months of steady decline, thanks to new contracts with giant Asian customers, China and South Korea. With oil exports constituting more than three-quarters of export earnings, Tehran is now in a relatively better position to defend its falling currency. In fact, the rial has indeed experienced some recovery in recent weeks, appreciating from the record-low of 37,000 rials against 1 dollar in early October to around 27,000 rials against 1 dollar today. Of course, the most recent financial and hydrocarbon sanctions by the European Union will further complicate the process by which Iran intends to translate its rising exports into a stronger local currency.
Another surprising development is in the tourism sector, which has also experienced an unexpected spike. “Although most sectors of Iran’s economy are struggling and oil revenue has steeply declined, foreign purchasing power is at an all-time high in Iran due to a plunge in the value of the Iranian currency, the rial,” reported Jason Rezaian of the Washington Post.
The Iranian government has circumvented transatlantic sanctions by an ingenious mixture of manifold countermeasures. It has negotiated sovereign insurance deals with major customers such as China, India, Japan, and South Korea, while considering barter deals (sweetened by heavy discounts and flexible payment arrangements) to woo major customers and continue large-scale oil trade. Iran has also expanded its tanker storage capacity by purchasing/building new oil-transporting vessels, smuggled oil through neighboring countries like Iraq, and stealthily transported oil — with off-the-radar and/or or ‘foreign flagged’ ships — from its ports to major destinations in East Asia. This explains Iran’s ability to increase oil exports by almost 30 percent in November, compared to previous months.
Moreover, the government has instituted some draconian measures to stave-off the impact of sanctions. It has further slashed imports, postponed its subsidy cuts, reduced money supply, raised interest rates, and jailed so-called ‘currency manipulators’. It has also encouraged domestic manufacturing. Aside from the government’s recent ban on imports of around 77 luxury products, atop reductions in 52 other non-essential goods, the fall of the Iranian currency — especially in the black market – has also eroded the competitiveness of imported capital goods, which have hammered local producers in recent years.
It’s important to note that the Iranian government has considerable foreign exchange reserves, estimated at between $80-100 billion, giving it significant ability to sustain imports for an extended period and defend its currency amid growing international restrictions. With a multi-tiered foreign exchange system, the government has an ability to cushion the most vulnerable sectors — incidentally, the backbone of the regime – against major disruptions in the import of basic commodities. After all, Iran’s structurally high inflation more the product of a loose monetary policy and major subsidy cuts that begun in 2010.
In some ways, it is Iran’s relative resilience — and ability to avoid a total collapse — that may explain its willingness to explore direct talks with Washington. Tehran feels that it has enough wiggle room to avoid total unilateral concessions and negotiate a more mutually-favorable, face-saving outcome — perhaps, before it’s tool late.
- Richard Javad Heydarian is a Philippine-based foreign affairs analyst, specializing on international security and economics. He can be reached at jrheydarian@gmail.com
]]>It’s not easy for a European observer of US politics to understand why the US Congress seems so much more concerned by Iran’s nuclear activities than by those of North Korea (the DPRK). Congressional pressure on the White House to put a stop to Iranian activities seems never-ending and Congressional majorities [...]]]>
It’s not easy for a European observer of US politics to understand why the US Congress seems so much more concerned by Iran’s nuclear activities than by those of North Korea (the DPRK). Congressional pressure on the White House to put a stop to Iranian activities seems never-ending and Congressional majorities for anti-Iranian resolutions are staggering. In comparison, when did Congress last pass a resolution requiring the administration to take action against the DPRK?
On the face of it, this makes little sense. To a European, North Korea looks to be a greater and more actual threat to US interests than Iran.
North Korea is sitting atop enough plutonium for perhaps a dozen nuclear weapons. Two underground nuclear tests have shown that the North Koreans are able to put together nuclear devices, though experts surmise that these are still somewhat rudimentary.
North Korea has also acquired the capacity to enrich uranium. Western experts have seen a relatively small enrichment plant at the main DPRK nuclear research centre. There has been speculation that there exists a larger plant deep within the mountains in the North of the country.
Iran has no plutonium. Iran possesses enough low-enriched uranium for half a dozen nuclear weapons but has so far shown no sign of wanting to enrich this material to the 90% level required for weapons. The Iranians are not suspected of having conducted nuclear tests; they may not be capable of assembling a workable nuclear explosive device.
North Korea expelled the inspectors of the International Atomic Energy Agency (IAEA) at the end of 2002, and has only allowed them back in for a brief period since. Over the last ten years no state has received as many IAEA inspections as Iran, whose two enrichment plants were declared to the IAEA before they started to operate.
North Korea withdrew from the Nuclear Non-Proliferation Treaty (NPT) in early 2003, having failed to correct the nuclear safeguards non-compliance declared by the IAEA in 1993. Iran corrected its pre-2004 safeguards failures within two years of their discovery; it expressed regret over these transgressions; and ever since it has affirmed the fullest of commitments to the NPT, to which it became a party fifteen years before the DPRK.
North Korea’s nuclear weapons are viewed as a threat by two of the US’s most valuable allies: Japan and South Korea (the ROK). These two allies are crucial to the US’s defence of its strategic interests in the Western Pacific. In the event of hostilities between the US and China (heaven forefend!) Japan would offer the US vital staging facilities, akin to those the US would have enjoyed in the UK if the US needed to go to war on the European mainland.
US strategic interests in South West Asia are on the wane. The US is now self-sufficient in natural gas and imports less than 12% of the crude oil it consumes from the Gulf; it could quite easily switch to African and American suppliers if Saudi and Iraqi supplies were threatened. Over the last decade the risk of Iraqi transfers of WMDs to Al Qaeda and Al Qaeda acquisition of safe havens in the Middle East has been eliminated (albeit at a price!).
Since the end of the Cold War, over twenty years ago, no single power has been capable of challenging US influence in South West Asia, whereas China is increasingly seen in the US as an emerging challenger to the US in East Asia.
When it comes to making belligerent noises, Iran’s leaders can’t hold a candle to those of North Korea. And the average alienist would surely find it easier to treat the former than the latter.
In 2011 US merchandise exports to the Far East were worth $286 billion and imports $718 billion. Comparable figures for South West Asia, including Turkey and Israel, were $71 billion and $108 billion. Far Eastern investors supply the US with a far larger percentage of external credit than do Middle Eastern investors. Far Eastern corporations are major employers and tax-payers in the United States.
All of these very basic facts must be familiar to Congressional staffers, if not to members of Congress. So how can one explain the disproportionate attention that Congress pays to Iran’s nuclear activities?
I have a theory. But I think it would be more appropriate for me to leave readers to come up with their own answers. I suspect that most will be honest enough to admit to themselves that they have a pretty shrewd idea as well.
]]>This past week a couple of articles have been published that hint at the central incoherence of the United States’ Iran policy. The arguments are not necessarily new, but they show in concrete terms how the stated objective of US sanctions, which is to change the calculations and behavior of Iran’s [...]]]>
This past week a couple of articles have been published that hint at the central incoherence of the United States’ Iran policy. The arguments are not necessarily new, but they show in concrete terms how the stated objective of US sanctions, which is to change the calculations and behavior of Iran’s leaders, is undermined by the same sanctions that end up weakening – at times even endangering – the domestic forces presumably required to leverage the sanctions’ power and result in a change of behavior.
Virginia Tech economist Djavad Salehi-Isfahani explains how the sanctions regime is threatening Iran’s bond to the global economy, not only through the straight-jacketing of the middle class and private sector, which is the promoter of that bond, but also hindering the point of view that is supportive of that bond. In other words, instead of helping to promote a developmental state whose behavior is moderated by the multi-faceted links created, the sanctions regime strives to sever those links based on the claim that severing those links will eventually make the Islamic Republic a better global citizen!
James Ball’s article in the Washington Post is even more damning. The domestic actors striving to change the behavior of the Iranian state, it turns out, do not merely constitute unfortunate collateral damage. They are the direct recipients of policies that deny them protective tools, leaving them vulnerable to significantly more powerful entities which always find ways to get around sanctions and access the instruments of repression that they need to carry out their objectives.
These arguments are slightly different from the suggestion that sanctions are a form of collective punishment with the Iranian population ending up as the victims of Iranian leaders and foreign powers locking horns. The sanctions policy is assessed in the way that all policies should be assessed: What is the policy intended to do, who is supposed to benefit from it or be harmed by it, and are the policy instruments aligned with the policy objectives. In this case, the evidence offered suggests they are not.
There are, however, other ways of addressing the question of inconsistency between instruments and objectives. One way is to ignore the inconsistency while giving rhetorical lip service to the sublime cause of the Iranian people freeing themselves from the yoke of dictatorship. The objective of this policy, it is said, is to change the behavior of the Iranian government. External pressure will also eventually payoff on its own. No need to worry about what sanctions will do to Iran’s social fabric, economy, and the private sector in the meanwhile. Sanctions are both feasible and effective given American muscularity and the Iranian historical tendency to give in to overwhelming pressure eventually. This formulation is apparently based on a joke Iranians make about themselves: “Iranians never give in to pressure unless it is lots of pressure.” As for those freedom-loving Iranians, they’ll find a way to foment change in Iran and aim it in a favorable direction even in spite of us making their path more difficult because of their incredible desire and energy to be free.
The problem with this argument lies first in giving a lofty role to desire (as opposed to instruments for fulfilling that desire) and second, in refusing to acknowledge that in no country is there “a people” with a collective desire. Iran, like elsewhere, is a country consisting of a multiplicity of interests, desires, power centers, and a differentiated population with vastly different means of access to resources. Democracy, like elsewhere, will not arise out of Iranian collective desire but out of negotiations and accommodations among these multiple interests. This very basic point is not rocket science – especially given the US’ own experience with democracy. The refusal to understand this point reveals either the shallowness of the commitment to any kind of democratic project in Iran or a naïve hope that external pressure will delegitimize the regime and open a path for a more democratic Iran.
But perhaps I am searching for coherence in the wrong places. The US’ Iran policy is not that incoherent if the objective is not aimed at changing the calculus of the Iranian government and rather intended to simply harass, isolate, or even destabilize Iran. In fact, one can argue that the Obama Administration, unlike the Bush Administration, has found a perfect formula for this intent, which is also a good fit for the way the American bureaucratic structure works.
Rather than confronting Iran with an all-out sanctions regime, the US has settled on an escalating sanctions regime. Every couple of month or so, it announces a new set of sanctions to keep the Islamic Republic off balance and in search of new ways to get around sanctions. Of course, this is partly necessitated by the reality of the oil market. The complete shut off of Iran’s oil exports would have had a drastic effect on oil prices. But in any case, an escalating sanctions regime is a much better tool for harassment – or what some in Iran call psychological and economic warfare – than an all-out sanctions regime.
The Iraqi sanctions regime is a good example of why going for an all-out sanctions regime is not a good instrument; after a while, the sting wears off and ways are found around it. Even Donald Rumsfeld, by July 2001, was suggesting that one US policy option was to “publicly acknowledge that sanctions don’t work over extended periods and stop the pretense of having a policy that is keeping Saddam in the box when we know he has crawled a good distance out of the box”.
An escalating sanctions regime, on the other hand, assures that the initiative remains in US hands and the Islamic Republic – and by implication the people who live and work in the Islamic Republic – are kept off balance. It also has the added value of making a whole lot of people in various bureaucracies work hard for their paycheck.
The folks at the Treasury Department strive hard to find new ways and new entities to sanction; folks in the State Department work hard to get exemptions for allies (and even non-allies) who presumably have done well in reducing their oil imports from Iran exactly at the same time that the Treasury is tightening the noose in some other areas. Folks in the Department of Energy also work hard to determine exactly how much of Iranian oil can be kept off the market before prices rise.
And the game continues. Just watch to see what happens after the six-month exemption period is up for Japan, South Korea, and…
The US’ Iran policy cannot be considered incoherent if the policy objectives and the instruments have become the same. It can still be considered immoral for trying to add to the economic woes of a good part of the Iranian population – irrespective of the fact that the Iranian government is most responsible for those economic woes – particularly at a time when so many people in the world are already suffering from unemployment and economic downturn. But it is not incoherent. It is intended to harass and it is doing so in a calculated and now rather routine, bureaucratic way. Weaning from routines and habits will be hard.
]]>The editorial board attributed South Korea’s cooperation on sanctions to its “growing up as a democracy,” and Japan’s acquiescence on the issue as a much needed about-face from [...]]]>
The editorial board attributed South Korea’s cooperation on sanctions to its “growing up as a democracy,” and Japan’s acquiescence on the issue as a much needed about-face from its “needless tiff with the White House over a troop relocation agreement in Okinawa.”
While glossing over the complexities of both Seoul and Tokyo’s relationships with Washington — which, I think it’s fair to say, amount to a lot more than South Korea “growing up” and Japan’s mea culpa for a “needless tiff” — the seeming tightening of the sanctions regime on Tehran should be put in context.
Reports do seem to confirm that sanctions have had a measurable and noticeable effect on Iran’s trading relationships, but sanctions have also resulted in Iran expanding trading relationships in Latin America and Africa, and looking towards expanding trade with much bigger economies, such as China.
According to All Headline News:
Chinese Transport Minister Liu Zhijun is expected to visit Iran Sunday to sign a $2 billion contract to build a 360-mile-long railway linking key Iranian destinations that could later join to existing Iraq and Syrian railway networks and extending to the Mediterranean Sea.
Experts on U.S.-Iran relations Flynt and Hillary Mann Leverett responded to the little-reported news item on China’s expanding trade relationship with Iran on their blog, The Race for Iran, writing:
None of the initiatives discussed in the news report cited above violate UN sanctions against Iran. In fact, we cannot see how these efforts would even violate U.S. or other unilaterally-defined national sanctions against the Islamic Republic. Nevertheless, there have been other indications in recent weeks that China is not going to let a U.S.-led push to maximize Iran’s international economic isolation get in the way of Sino-Iranian economic ties. India has taken a similar position, see here, and may, like China, be acting to strengthen its economic and strategic ties to Iran.
Indeed, a look at Iran’s trading partners clearly shows the importance of China’s huge economy to Tehran.
According to the CIA World Fact Book, Iran’s Export economy breaks down as follows:
China 16.58%, Japan 11.9%, India 10.54%, South Korea 7.54%, Turkey 4.36% (2009)
And its import economy is also worth examining.
UAE 15.14%, China 13.48%, Germany 9.66%, South Korea 7.16%, Italy 5.27%, Russia 4.81%, India 4.12% (2009)
No doubt Japan and South Korea’s implementation of sanctions will change those statistics, but China and India’s growing regional and global clout would indicate that Tehran’s trading relationships with these regional powerhouses will become an increasingly important component of the Islamic Republic’s foreign trade. As sanctions tighten on Iran’s economy, no one should be surprised to see Tehran turn to alternative, non-western aligned economies to fill the gaps.
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