Iran traded 16.74 million tons of goods worth $9.71 billion with the six Persian Gulf littoral states, namely Iraq, Kuwait, Qatar, the UAE, Bahrain and Saudi Arabia, during the first four months of the current fiscal year (March 21-July 22), latest data released by the Islamic Republic of Iran Customs Administration show.
The UAE was Iran’s top trade partner among the countries under review with 7.55 million tons worth $714 billion. It was followed by Iraq with 6.97 million tons worth $2.45 billion and Kuwait with 1,661 tons worth $60.86 million.
Iran’s exports to the six countries totaled 12.83 million tons worth $4.76 billion during the period.
The main export destination was Iraq with 6.93 million tons worth $2.4 billion, followed by the UAE with 3.95 million tons worth $2.26 billion, Kuwait with 1.66 million tons worth $57.85 million and Qatar with 286,771 tons worth $39.88 million, Bahrain with 3,839 tons worth $2.97 million and Saudi Arabia with 121 tons worth $15,688.
Imports stood at 3.64 million tons worth $4.95 billion.
The UAE topped the list of exporters to Iran among the Persian Gulf states with 3.6 million tons worth $4.88 billion. It was followed by Iraq with 38,783 tons worth $54.7 million, Qatar with 701 tons worth $13.77 million, Kuwait with 1,325 tons worth $3 million and Bahrain with 27 tons worth $512,985.
Iran traded 60.87 million tons of goods worth $31.9 billion with Persian Gulf littoral states in the fiscal 2021-22, up from $22.36 billion in the year before. Exports totaled 45.43 million tons worth $14.15 billion while imports stood at 15.43 million tons worth $17.76 billion.
Ties With Persian Gulf States Improving
This week, the UAE declared that its ambassador to Iran, Saif Mohamed Al-Zaabi, would return to Tehran “in the coming days” more than six years after the Persian Gulf Arab state downgraded its diplomatic relations with Iran in 2016 in solidarity with Saudi Arabia after the storming of the Saudi Embassy in Tehran by Iranian demonstrators in protest at the Saudi execution of the prominent Shia cleric Nimr Al-Nimr, reads an article in Al-Ahram. Excerpts follow:
The UAE decision to restore its ambassador in Tehran is in line with its efforts to strengthen relations with its regional rival in order “to achieve the common interests of the two countries and the wider region,” the UAE Foreign Ministry said in a statement.
Earlier this month, Kuwait also sent its ambassador to Tehran after six years of absence when it also downgraded diplomatic relations with Tehran in solidarity with Saudi Arabia.
Relations between Riyadh and Tehran are also gradually improving. The two countries have held five rounds of bilateral talks with Iraqi mediation to ease tensions between them over regional crises, including that of Yemen.
The timing of the UAE and Kuwaiti steps to return their ambassadors to Tehran is additionally significant in that nuclear talks between Iran and the West are entering a crucial stage, and there is optimism in Tehran, Washington and the European capitals that a deal could be announced in September.
Although the nuclear deal focuses on curtailing Iran’s nuclear activities in exchange for the lifting of sanctions, there is also a realization that without regional support for the new deal it will be short-lived.
Amid the growing European and US conviction that regional support is important to preserving any nuclear agreement, US President Joe Biden spoke this week to German chancellor Olaf Scholz, French President Emmanuel Macron and UK Prime Minister Boris Johnson, as the US weighs a response to Tehran’s position on the latest proposals.
The leaders discussed “ongoing negotiations” toward a deal, including “the need to strengthen support for partners in the Middle East region,” according to a US summary.
The four-way talks between Biden and the European leaders give the impression that the US administration is keen to reassure the Persian Gulf states that their interests and security will be taken into account in any agreement with Tehran.
But even so, the US assurances to the Persian Gulf may be too little, too late. UAE diplomatic sources in London told Al-Ahram Weekly that the Persian Gulf states began reevaluating their relations with Tehran in 2019 independent of the US Middle East policy.
“There is a realization that the countries of the region need to protect their security by a rapprochement with Iran. This rapprochement is important and beneficial for the entire region… Security equals prosperity; it is as simple as that,” a UAE diplomat told the weekly.
The idea that Persian Gulf-Iran relations are developing independent of Washington is supported by evidence.
Last month, the UAE foreign minister and his Iranian counterpart had a telephone conversation and discussed strengthening relations.
Anwar Gargash, diplomatic adviser to the UAE president, emphasized that his country was “taking steps to deescalate tensions with Iran as part of a policy choice toward diplomacy and away from confrontation”.
A few months ago, the UAE and Iran signed an economic cooperation agreement and last December, Turkey, Iran and the UAE signed a similar agreement under which goods are sent from the UAE to Iran and then to Turkey over land.
UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan, brother of UAE ruler Sheikh Mohamed bin Zayed, visited Iran last year to look at developing economic and political relations.
The announcement of the return of the Emirati ambassador to Tehran this week, therefore, comes within the framework of a steady improvement in relations.
Another reason for the recent improvement in relations is the nuclear negotiations between Iran and the West. A nuclear deal could be reached soon because of the West’s need to reduce Iran’s nuclear activities and keep its program under the supervision of the International Atomic Energy Agency. The Persian Gulf states do not want to be a spoiler.
Another factor helping to improve relations is the Russian-Ukrainian war. In this crisis, the Persian Gulf seems closer to the stance of China, Russia and Iran than to that of the US and Europe.
Even before the crisis started, Iran, Saudi Arabia, the UAE, and other Persian Gulf countries cooperated closely in the OPEC+ group of countries to support energy prices in the global market and this has been strengthened since the start of the war in February.
Cooperation is expected to continue once Iran returns to the global oil market after a nuclear deal is reached and Tehran seeks to win back former major clients such as India and South Korea, and its biggest client China.
The cooperation could be tested soon as Saudi Arabia has warned it could choose to lead the OPEC+ group in cutting oil production if prices continue to fall, arguing that they have become “disconnected” from the fundamentals of the market.
Saudi Energy Minister Abdul-Aziz bin Salman told the US Bloomberg TV channel that OPEC+ had “the capability to reduce output at any time and in different ways,” with crude prices having fallen from nearly $120 a barrel in June to about $95 a barrel at present.
His comments suggest that Saudi Arabia is unhappy with the latest drop in oil prices. He argued that increased investment in the energy sector is needed to help meet rising global demand and warned that there is little spare capacity available, should Russian supplies fall sharply under Western sanctions.
Many countries have welcomed the falling oil prices, including the US where Biden has made them a pillar of his campaign ahead of the midterm elections in November. Biden travelled to Saudi Arabia earlier this summer, in part to push the country to increase oil production to help keep prices under control.
The cooperation between Iran and the Persian Gulf may be more urgent, as the revival of the nuclear deal approaches because while Iran wants to pump millions of barrels of oil a day to regain its lost share in the global market and address its internal economic problems, the OPEC+ countries, especially Saudi Arabia and Russia, do not want to see a drop in oil prices.
Coordination with Tehran will, therefore, be of great importance, and the Saudi oil minister’s statement suggests that Riyadh will indeed move to reduce its production when Iran returns to the global market in order to ensure that prices are kept close to $100 per barrel.
The nuclear agreement when it was reached in 2015 and then abandoned in 2018 was the cause of great tension between the Persian Gulf and Iran. But the prospects of the renewal of a 2022 nuclear deal open the door to improved relations.
However, any long-term improvement will depend on security understandings between the Persian Gulf and Iran in Yemen, Iraq, Syria and Lebanon, and these are still in their infancy.
