Upward Trend in Iran-UAE Trade Transactions
EghtesadOnline: The UAE was Iran’s second biggest export destination, following China, in the last Iranian year (ended March 20, 2017), accounting for 17% of all Iranian exports.
Iran’s exports to the Arab country during the period stood at 13,364 tons of non-oil commodities (minus natural-gas condensate) worth $5.28 billion, up by 55.7% and 7.9% in tonnage and value respectively year-on-year, the Islamic Republic of Iran Customs Administration reported.
Iranian non-oil exports to the UAE has seen an overall upward trend since its low of $1.72 billion worth of 3,414 tons of commodities shipped in the fiscal 2006-7.
Over the years, Iran’s annual trade with UAE has continuously seen deficits. However, between the fiscal 2011-12 and 2016-17, the gap has become narrower and reached its all-time low of $1.125 million last year, according to Financial Tribune.
Iranian exports to the UAE in the fiscal 2012-13 dropped considerably due to the international sanctions imposed on Iran over its nuclear program.
The UAE acted as Iran’s unofficial backdoor during the sanctions, and distribution and supply chain channels are already carved out in these markets.
In fact, Jebel Ali Port played an active role in UAE-Iran trade, which mostly came in the form of reexports during the sanction years.
Natural-gas condensates entered the list of Iran’s non-oil exports to the Arab country as of last year. Iran’s gas condensates exports to the UAE stood at 5.5 million tons worth $2.1 billion last year.
According to World Trade Organization, the UAE had a 1.4% share in the total global imports in 2016. The Middle East country has been a WTO member since 1996. Iran, however, remains the world’s biggest economy outside the world body to date.
The ongoing Iran-Saudi Arabia strife has affected relations between Tehran and the UAE to some extent.
The Saudi execution of top Shia cleric Sheikh Nimr al-Nimr last year sparked a flurry of retaliatory developments between Tehran and Riyadh, with the latter halting diplomatic and trade ties as well as air traffic.
Soon after, a group of Saudi allies, including Bahrain, Sudan, Djibouti and Somalia, followed suit and broke off diplomatic ties with Iran, while Kuwait and Qatar recalled their envoys and the UAE downgraded its relations to chargé d’affaires.
Although Iran reacted by saying it was shifting its trade policy to Oman, commercial exchanges with the UAE has not been affected.