Producing some 2.2 billion barrels of oil per day, Iran is the world's fourth largest oil exporter.
Iran borders the Strait of Hormuz through which 40% of the planet's oil is shipped.
Iran's refusal to release the 15 captured Britons could ignite a military conflict that effectively shuts down Strait of Hormuz shipping lanes, dramatically driving up oil prices and crippling world economies - particularly those of countries that depend heavily on Iranian oil exports.
Iranian Oil Exports
Iran's oil exports accounted for 80% of that country's totals in 2006. Mining products and chemicals generated about 10% of Iranian exports, while manufactured goods including Persian rugs comprised 7%. Agricultural products like fruit and nuts came in at 3%.
Despite tough sanctions, Iran's trade surplus was almost $18 billion in 2006. The United States has maintained broad trade restrictions against Iran since the hostage crisis in 1979. For example, Washington prohibits American oil companies from operating in Iran, placing the U.S. at a distinct disadvantage in world oil trade.
In contrast, China continues to develop its energy interests within Iran. China has used its veto power on the UN Security Council to block global sanctions against Iran.
Top Countries For Iranian Exports (2006)
The following list shows the top nine customers for Iran's exports. In 2006, Iran shipped US$63.2 billion worth of exports in total.
- Japan ... US$10.7 billion (16.9% of total Iranian exports)
- China ... $7.1 billion (8.3%)
- Italy ... $3.8 billion (6%)
- South Korea ... $3.7 billion (5.8%)
- Turkey ... $2.9 billion (5.7%)
- Netherlands ... $2.8 billion (4.6%)
- France ... $2.6 billion (4.4%)
- South Africa ... $2.6 billion (4.1%)
- Taiwan ... $2.6 billion (4.1%)
The above trade partners consumed about 63% of Iran's total exports. Asian countries purchased close to 40%.
Top Countries From Which Iran Imports (2006)
Iran imported some US$45.5 billion worth of mostly manufactured goods from the following countries.
- Germany ... $6.3 billion (13.9% of total Iranian imports)
- United Arab Emirates ... $3.9 billion (8.4%)
- China ... $3.8 billion (8.3%)
- Italy ... $3.2 billion (7.1%)
- France ... $2.9 billion (6.3%)
- South Korea ... $2.5 billion (5.4%)
- Russia ... $2.2 billion (4.9%)
Iran's top four import partners generated over 54% of its total imports. Iran's major weakness is a lack of refineries, so that almost 10% of Iran's imports is gasoline.
United Nation Sanctions Against Iran
On December 30, 2006, the UN Security Council passed Resolution 1737 which bans any trade with Iran that could contribute to Tehran's uranium enrichment program. It's not clear how the UN plans to enforce its resolution or monitor its success.
The Security Council also enacted Resolution 1747 on March 24, 2007 which prohibits all arms exports from Iran but acknowledges Iran's right to use nuclear technology for peaceful purposes.
Most recently, Russia blocked British efforts to convince the UN Security Council to demand that Iran release 15 British prisoners. The council issued a milder statement expressing "grave concern" about Iranian actions.
New World Trade Balance Of Power
As Iran has shown, the U.S. and Britain cannot always impose their wills in global trade. International watchdogs like the World Trade Organization and the UN have also proven ineffective lately.
A coalition of Asian trade giants led by China and including the likes of Japan, South Korea, Russia and India has the clout to compel Tehran to act more responsibly. Unfortunately, these Asian trade partners seem more focused on leading the consumption of Iranian oil to fuel their booming economies.
Sources For This Article
This article presents independent calculations and insights based on data drawn from source material in the CIA's World Factbook. This article also focuses on the list of UN sanctions against Iran at globalpolicy.org/security/sanction/indxiran.htm.
