Iran has successfully navigated the first phase of its resistance to U.S. sanctions pressure. The U.S. State Department has admitted it’s goal of reducing Iran’s oil exports to zero is not feasible.
The goal now is a 25% drop to 800,000 barrel per day. And that is no joke. It’s a big drop from where Iran was looking to produce in the coming years under the auspice of the JCPOA.
The U.S. will not stop until all avenues have been exhausted or Trump fires his current cabinet.
Iran’s total non-oil exports have suffered as well, since gas condensate exports have also dropped along with the crude oil numbers.
But Iran is finding friends in other places. They are currently finalizing a free trade agreement with the Eurasian Economic Union (EAEU) with Belarus leading the talks at the 15th meeting between their Joint Economic Committee.
Iran’s non-oil exports, however, are still just one-fifth of their peak exports. Like Russia it is working quickly with regional partners to change that dynamic.
It won’t be enough to overcome the U.S.’s economic pressure in the short term.
But as I always say if it survives the initial onslaught then market forces open up opportunities for change. Things like INSTEX, the EU special purpose vehicle for getting around U.S. sanctions, is a perfect example.
Bilateral trade outside of the U.S. dollar is another.
North-South Trade Routes
The completion of the North South Transport Corridor (NSTC) is also helping. For example, trade turnover between Azerbaijan and Iran rose more than 70% last year.
Speaking in the event, [Azeri Trade Minister] Mustafayev mentioned the 12 meetings between the two countries’ presidents during the past five years and said “that is an indication of how good the relations between the two countries are.”
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