Oil, gas and Iran economic analyst
Iran’s foreign trade has suffered a sharp contraction in the first month of war with the United States and Israel, newly released customs data show, signaling a severe blow to the country’s already fragile economy.
Figures from Iran’s customs administration show non-oil trade collapsed in the final month of the previous Iranian fiscal year (February 21–March 22), falling to just $6.4 billion—down 30% from the previous month and 50% from a year earlier.
The plunge coincided with military escalation that began on February 28, when US and Israel attacked Iran and Iran retaliated with strikes against Arab neighbours across the Persian Gulf.
The conflict disrupted shipping routes and strained regional trade links.
The fallout has been especially visible in trade with Iran’s main commercial partners. The United Arab Emirates, Iran’s second-largest trading partner, reportedly suspended trade with Tehran in early March.
Chinese customs data also point to a steep decline in bilateral trade. China’s non-oil trade with Iran fell to just $184 million in March, compared with more than $907 million in the same month last year—roughly one-fifth of its level a year earlier.
While Iranian customs data exclude crude oil exports, tanker-tracking data from Kpler indicate Iranian crude deliveries to Chinese ports averaged around 1.53 million barrels per day in March, about 15% lower than in March 2025, suggesting energy exports are also under pressure.
In total, Iran’s non-oil foreign trade during the last fiscal year stood at $109 billion, down 16% from the previous year. Imports accounted for 53% of the total, underscoring the economy’s reliance on foreign supplies at a time of escalating geopolitical disruption.
The outlook may worsen in the months ahead.
Following Israeli strikes on petrochemical facilities, Iran has banned petrochemical exports. On Monday, the Iran Trade Promotion Organization ordered a halt to exports of steel slabs and sheets until May 30 as the country’s steel industry came under pressure following US-Israeli strikes.
The secretary of Iran’s steel producers’ association said work was underway on an urgent plan to import steel slabs and hot-rolled sheets, underscoring the scale of the disruption.
At the same time, steel production facilities in Isfahan and Khuzestan—which account for roughly 70% of Iran’s steel output—have reportedly suffered major damage.
Together, petrochemicals and steel generate an estimated $18 billion to $20 billion in annual exports, accounting for more than one-third of Iran’s non-oil export revenues. Prolonged disruption in those sectors would hit government revenues, industrial output and access to foreign currency.
Additional pressure is also emerging at sea. In response to Iran’s move to block the Strait of Hormuz, the United States has begun enforcing a naval blockade on Iran, a development likely to further restrict both oil and non-oil trade.
With US-Iran diplomacy still deadlocked and sanctions relief appearing distant, the outlook could worsen further in the absence of a deal to ease pressure on trade and energy exports.
Taken together, the data suggest Iran may be facing not a temporary slowdown but the early stages of a historic external shock.
