Iran Steps Up Trade

Sanctions have done little to lighten Iranian regime’s pocketbooks

Alaeddin Boroujerdi / AP
• December 7, 2012 2:23 pm


Iran has moved to increase its trade relations with Arab partners across the Middle East in recent weeks, complicating Western efforts to cripple Tehran’s economy through sanctions, according to reports.

As Tehran moves to bolster its bilateral trade relations, senior regime leaders have indicated that Western sanctions are leading Iran to become more economically independent and less reliant on oil revenue.

The region’s continued dependence on Iran’s energy sector and other exports suggests that Western sanctions have not dented the pocketbook of Tehran’s top leaders.

Iranian officials estimate that the government will earn $70 billion in non-oil exports by March 2013.

A senior Turkish official lashed out at American sanctions in recent days, stating that it will ignore sanctions and continue to do business with Iran’s energy sector.

"Turkish officials have told American officials that a sanction against the import of natural gas from Iran is in fact imposing sanction on Turkey; Ankara does not support unilateral embargos against Tehran; Ankara needs Iran's natural gas," Turkish energy minister Taner Yildiz was quoted as saying Thursday by Iran’s semi-official Fars News Agency.

"Despite sanctions, Turkish banks will find their own way for transfer of money for imported natural gas from Iran and Turkey's Energy and Natural Sources Ministry would continue buying this kind of energy from Iran," Yildiz was quoted as saying.

Iran serves as the second largest gas supplier to Turkey, Yildiz said.

Turkey then transports Iranian natural gas into Europe, according to the report.

Fars further suggested that Iran is easing its fiscal woes by working closely with Asian partners who have ignored Western sanctions, particularly those implemented by the U.S.

"Iranian officials have dismissed U.S. sanctions as inefficient, saying that they are finding Asian partners instead," Fars reported. "Several Chinese and other Asian firms are negotiating or signing up to oil and gas deals."

The Swiss energy firm EGL recently inked a 25-year gas deal with Tehran, sparking American ire.

"As we noted in the past when this deal was first announced, oil and gas deals with Iran send the wrong message when Iran continues to defy UN Security Council resolutions. We have raised our concerns with the Swiss government about this arrangement on multiple occasions," a spokesman for the U.S. embassy in Bern told the Jerusalem Post.

Germany also struck a deal with Iran earlier this year worth an estimated $150 million.

Business leaders in Italy have also expressed dismay with economic sanctions. They have vowed to continue their business dealings with Iran.

"Italian and European officials should specify a certain banking channel for doing legal and legitimate dealings between European and Iranian companies and businessmen," Rosario Alessandro, the head of the Italy-Iran Chamber of Commerce, was quoted by Fars as saying Thursday.

Iranian officials were in Rome Thursday to present lucrative investment opportunities to Italian business leaders, according to the repot.

An Iranian envoy met leaders in Azerbaijan Wednesday to discuss avenues to increase ties between the two countries' energy sectors. The Azeri official reportedly described Iran as a "friend and neighbor."

Pakistan also has been listed as high on Tehran’s list of trading partners.

Alaeddin Boroujerdi, chair of the Iranian parliament's National Security and Foreign Policy Commission, announced earlier this week that Iran and Pakistan are close to finalizing a deal to build a gas pipeline between the two nations.

"The final agreement [on the project] will be most likely signed during Asif Ali Zardari's upcoming visit to Tehran," an Iranian foreign ministry official was quoted as saying Wednesday.

Iran also has boosted by nearly 40 percent the amount of power it supplies to neighboring countries, particularly India and Pakistan, according to Fars.

Michael Rubin, a former Pentagon adviser on Iran and Iraq, said that Iran's booming trade industry is a sign that many countries in the Middle East and Europe remain dependent on the regime's copious energy reserves.

"Iran brings out the worst in many of our allies," said Rubin, a scholar at the American Enterprise Institute. "Economic opportunism—sometimes greased by outright bribery—trumps freedom in a lot of places."

The biggest hole in sanctions, however, is Barack Obama," Rubin added. "His waivers [on sanctions] make legal the same sanctions avoidance in which many of these other countries engage. Moral clarity is important."

Tehran meanwhile has downplayed the effect of Western sanctions on its economy.

Iranian General Mohammad Reza Naqdi said Friday that a decrease in oil revenue should be "turned into opportunities to boost self-sufficiency and produce economic independence," according to Fars.

Reports earlier this year indicated Iranian exports of copper and medicine have drastically risen in recent months, earning the regime more than a billion dollars in revenue.

Published under: Iran, Middle East