Iran’s Key Trading Partners Amid US Sanctions and Economic Pressures
Main Trading Partners and Economic Relationships
DUBAI, Aug 20 (Reuters) - A threat by U.S. President Donald Trump to impose unprecedented economic warfare and isolation on Iran could have implications for countries that trade with it. Trump warned of economic consequences for any country that supports Iran.
Here are some of Iran's main trading partners in recent years:
China
China’s Oil Imports from Iran
China, the biggest buyer of Iranian oil, could face additional pressures from the U.S. over its purchases if Trump follows through on his promise.
Over the past decade, China has created a ring-fenced system of refiners that process mainly Iranian oil and do not have much U.S. exposure.
Sanctions and Financial Channels
Iranian oil delivered to China has long been branded as Malaysian, and more recently Indonesian, and trades in a tight loop, is settled in Chinese currency and involves a chain of difficult-to-track intermediaries, say refinery sources and traders involved in the business.
The U.S. Treasury in April imposed sanctions on a Chinese independent refinery for buying billions of dollars’ worth of Iranian oil and warned Chinese banks of secondary sanctions if they facilitated trade of Iranian oil.
"Sanctions and pressure will not solve the problem. China calls on all parties concerned to take responsible measures to resolve the issue through political and diplomatic means," Chinese Foreign Ministry spokesperson Lin Jian told reporters in a briefing.
Volume and Value of Trade
Over 80% of Iran’s shipped oil has been destined for China, as Chinese independent refiners take advantage of discounted U.S.-sanctioned oil. Kpler estimates that China bought an average of 1.38 million barrels per day of Iranian oil in 2025.
United Arab Emirates
Economic Lifelines and Financial Ties
The United Arab Emirates has historically been one of Iran's most critical economic lifelines, and Dubai's banks have long held substantial Iranian-linked deposits, much of them now immobilised under U.S. sanctions.
Trade Volumes and Recent Developments
The UAE was among Iran's largest trade partners before the war, providing 30% of its imports worth an overall $21 billion in 2024, according to the World Trade Organization's latest figures. It also accounted for 13% of Iran's exports in the same year, the data showed. Non-oil foreign trade between the two countries totalled $6.6 billion in 2024, according to UAE economy ministry data, with the vast majority of trade represented by re-exports.
This week, the UAE suspended all financial and economic transactions with Iran until further notice, citing a military escalation by Tehran with a missile threat, refocusing the spotlight on fraught ties between the countries.
Turkey
Trade and Energy Cooperation
Turkey and Iran maintain significant economic ties, with Turkey importing Iranian natural gas and exporting manufactured goods to Iran. Turkey has not signalled any willingness to curtail commerce with Iran, with bilateral trade standing at around $5-6 billion annually, with Turkey exporting to Iran around $3 billion. Turkey imports almost all its natural gas consumption and Iran is a notable source, providing 13% of all gas imports.
Iraq
Trade Dynamics and Challenges
Iraq’s trade with Iran reached more than $10 billion in 2025, according to official Iraqi trade figures, with the relationship largely driven by Iranian exports of food, consumer goods and other products to the Iraqi market. Trade declined in 2026 after the Iran war started, which increased regional security risks and led to intermittent disruptions along key border crossings, as well as higher transport costs, said Mohammed Karim, an Iraqi trade ministry official with knowledge of trade activities with Iran. These conditions, combined with broader supply chain disruptions affecting the movement of goods, reduced the volume and reliability of cross-border commerce although the countries remain important trading partners, said Karim.
Energy Payments and Sanctions Risk
Energy is a key part of the relationship. Iraq pays Iran around $4 billion to $5 billion a year for natural gas, according to Iraqi energy officials, with the gas used to generate electricity. Two Iraqi energy officials said any new U.S. sanctions on Iraq could create significant challenges for Baghdad in maintaining payments for Iranian energy while avoiding exposure to U.S. sanctions, particularly given existing restrictions that have forced Iraq to use restricted accounts to settle payments.
Oman
Diplomatic and Trade Relations
Oman has long maintained cordial ties with Iran, dating back to before the 1979 Islamic revolution, with Muscat often acting as a mediator between Iran and other countries, including the U.S.
Recent Trade Figures
The countries' trade relationship has grown in recent years, with trade of goods totalling $1.5 billion in 2025 and $345 million in the first four months of this year, according to data from Oman's National Centre for Statistics & Information.
Pakistan
Trade Expansion and Informal Channels
For Pakistan, any U.S. action against countries involved in trade or assistance to Iran could be a serious setback, analysts said, amid Pakistan-Iran commitments to expand bilateral trade to $10 billion.
Informal Trade and Recent Agreements
Following past sanctions on Iran, formal trade between the two countries had come to a halt until recently. However, informal trade has taken exports and imports from both sides to approximately $4 billion, according to unofficial statistics. After the Islamabad interim agreement was signed in June, efforts were quickly made to expand trade cooperation. Pakistan and Iran have for years traded oil, wheat, rice, live stocks and medicines through informal channels.
India
Decline in Trade Due to Sanctions
India's trade with Iran dropped sharply in 2020, when Washington pressed on with sanctions on Tehran.
Trade Volumes Over Time
Two-way trade was cut by more than two-thirds to nearly $4.8 billion in the fiscal year 2019-20, from $17 billion in the previous year. Over the years, trade between India and Iran has fallen further, and stood at $1.63 billion in the fiscal year 2025/26, according to data from India's commerce ministry.
