Iran’s export might drop?

After oil, petrochemical products make the majority of Iran’s export. Now with the return of the sanctions, fears of drop in export of petrochemicals increase.

Iran’s petroleum Minister, Bijan Zanganeh, expresses his concerns about the pressures on Iran’s petrochemical clients. However, Mr Zanganeh believes that China as the main client, will find solutions to continue its trade with Iran.

In 2009, China imported 1 percent of its heavy polyethylene from Iran; while in 2017 this figure reached 24 percent. This amount of export is equivalent to 74 percent of Iran’s total heavy polyethylene production.

Jump in export from Iran to China in other petrochemical products can also be found. On the other hand, China and USA trade war can push the Asian ally more toward Iran.

Donyaye Eghtesad writes that China imported 2.3 million tonnes of polyethylene from the US, which now is due to 25 percent of import tax. Therefore, trading with Iran might become more convenient for China.

Although Iran could take advantage of the US-China trade war in order to export more of other petrochemicals, such as propane, however the path is not that smooth and the price does not determine everything.

Apart from financial channels which have become very difficult to find, logistics and transportations are also problematic. Since the US has returned the sanctions on insurance and other facilities needed to export goods, it becomes very complicated and sometimes costly for Iran to deliver the products to China or other clients, about which the Petroleum Minister seems very concerned.

Related article: Most valuable goods make less than 1% of total export