Figures released by Iran on June 24 show that “non-oil” exports increased 69% in the first three months of the Iranian calendar year, March 21 to June 20, compared to the same period l ‘last year.
Iranian customs reported that $ 10.7 billion worth of goods and non-oil products were exported during this period, which was considerably higher than during the same period in 2020 and even before the pandemic of Covid-19 in 2019.
Overall exports are believed to be over $ 20 billion, which means Iran has sold around $ 10 billion worth of crude oil, although customs have not said so, as part of its strategy to keep out crude oil. information about its oil trade secret to US sanctions. This is a substantial increase if this is true, but there is no information or breakdown available.
The outgoing Rouhani administration has presented the figures as a big success, taking credit after months of relentless criticism from extremists accusing the government of a three-year economic slowdown. There is no way to independently verify these numbers and it should be noted that Iran has repeatedly asserted that it has resisted pressure from US sanctions, so as not to appear weak in the current indirect negotiations. with the United States.
However, the export figures are not what they seem at first glance. Observers pointed out that more than 70% of non-oil exports went to just five neighboring countries, with Iraq and China at the top of the list, followed by Afghanistan, the United Arab Emirates and Turkey. But what is equally important, it seems that a noticeable part of the growth occurred in exports to Iraq and that the product that increased the figure was indeed fuel, not manufactured goods.
The only item that emerges from the quarterly growth was liquefied natural gas shipped to Iraq during the Iranian month of Khordad, May 21 to June 20, Iran’s main economic site Donyaye Eghtesad noted on Saturday. economy).
The reason Iran has pushed for this export is that US sanctions which ban Iranian crude oil exports do not prohibit the purchase of natural gas by other countries, especially by Iraq which benefits from ‘an American exemption to import electricity and natural gas from Iran. The same goes for motor gasoline which is not sanctioned and was the second major export to Iraq, according to Donyaye Eghtesad.
Khordad’s month exports were 112% higher than the same period in 2020. But of $ 4.4 billion in exports that month, $ 1.35 billion went to Iraq, with a substantial increase in fuel deliveries. In the previous two months, exports to Iraq amounted to around $ 500 million, again fuel being a substantial component.
Exports of natural gas and gasoline occur every month and it is possible that in the last quarter they started to increase and have become substantial in the last 30 days. Donyaye Eghtesad notes that the sudden increase in exports to Iraq cannot be explained by trucking data at border crossing points. The website quotes Iranian customs spokesman Rouhollah Latifi as saying that full details are still not available, but liquefied gas was the main export to Iraq.
Another problem with Iran’s increase in quarterly exports is the problem of repatriation of revenues, amid U.S. banking sanctions that would penalize any foreign bank for facilitating money transfers to Iran. For example, Iraq holds around $ 6 billion in funds owed to Iran for past imports, while trade with Afghanistan is based on more cash transactions, broken down into smaller transactions.
Iranian officials have also repeatedly pointed out that the face value of exports could also be misleading, as Iran directly or indirectly pays up to 25% more costs to be able to export goods. Whether it’s substantial discounts to attract foreign customers, additional shipping costs to circumvent US sanctions, or higher insurance premiums, Iran is making a lot less money than the numbers show. official exports.