Iran's services imports surge as goods trade slumps
Iran's imports of services surged to a record $25.5 billion in 2025 while merchandise imports fell sharply, according to newly released data from the Central Bank of Iran, highlighting a significant shift in the country's trade structure.
Services imports accounted for roughly one-quarter of Iran's total imports during the year, an unusually high share for an economy traditionally dominated by trade in physical goods.
At the same time, Iran's exports of services declined, pushing the country's services trade deficit to a record $17 billion. The deficit was 52% higher than in 2024 and roughly three times larger than in 2020.
Separate central bank data on foreign trade in goods point to an equally dramatic contraction in merchandise trade.
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Iran's imports of services surged to a record $25.5 billion in 2025 while merchandise imports fell sharply, according to newly released data from the Central Bank of Iran, highlighting a significant shift in the country's trade structure.
Services imports accounted for roughly one-quarter of Iran's total imports during the year, an unusually high share for an economy traditionally dominated by trade in physical goods.
At the same time, Iran's exports of services declined, pushing the country's services trade deficit to a record $17 billion. The deficit was 52% higher than in 2024 and roughly three times larger than in 2020.
Separate central bank data on foreign trade in goods point to an equally dramatic contraction in merchandise trade.
Iran imported approximately $49 billion worth of goods during the fiscal year ending March 21, a decline of 32% compared with the previous year. Non-oil exports also weakened considerably, falling 22% year-on-year to about $45 billion.
The figures suggest Iran's trade structure is undergoing a significant transformation, with services playing an increasingly prominent role while merchandise trade contracts.
The reasons behind the rapid rise in services imports remain unclear.
Iran's services imports primarily include transportation and logistics services, insurance related to foreign trade, financial transaction services, engineering and construction projects, technology purchases and other professional services.
One possible explanation emerged in a Wall Street Journal report published last October, which suggested that part of Iran's oil exports to China were being exchanged for services rather than cash payments or traditional oil-for-goods arrangements.
China is effectively the sole buyer of Iranian crude oil. According to estimates by the Organization of the Petroleum Exporting Countries (OPEC), Iran's crude oil exports were worth approximately $44 billion last year before accounting for sanctions-related discounts and the costs of circumventing US restrictions.
While the central bank data do not reveal the source of the imported services, the figures are consistent with the possibility that a growing share of Iran's oil revenues is being settled through services rather than conventional financial transfers or merchandise imports.
Another factor attracting attention is the role of the Islamic Revolutionary Guard Corps (IRGC) in both oil exports and major infrastructure projects.
Under Iran's previous budget law, the IRGC was tasked with exporting 700,000 barrels of crude oil per day, roughly half of the country's actual crude exports. The organization is also one of Iran's largest contractors in infrastructure and construction.
However, the central bank data provide no direct evidence regarding the destination of oil revenues or the beneficiaries of imported services.
The outlook for the current fiscal year is even more uncertain amid the conflict involving the United States and Israel.
Trade flows with the United Arab Emirates, Iran's largest supplier of goods, have reportedly been disrupted over the past three months.
Meanwhile, Chinese customs data show Iran and China recorded only about $400 million in bilateral non-oil trade during March and April combined, roughly one-fifth of the level recorded during the same period a year earlier.
Whether the shift toward services reflects changes in sanctions-evasion mechanisms, evolving arrangements with China, or broader economic weakness remains an open question. What is clear from the latest data is that Iran's trade profile is changing in ways not seen in recent years.
By suspending talks with Washington over Israel's campaign in Lebanon, Tehran has raised the stakes of postwar diplomacy and posed a critical question: is it successfully increasing its leverage, or overplaying its hand?
President Donald Trump announced Monday that Israel and Hezbollah had agreed to halt attacks following a flurry of calls with Israeli Prime Minister Benjamin Netanyahu and intermediaries linked to the Iranian-backed group.
Hours earlier, however, Iran suspended talks with Washington, citing Israel's military operations in Lebanon and threatening to open new fronts in the conflict.
The diplomatic turmoil comes as Israel carries out its deepest military operations in Lebanon in more than two decades.
Tehran argues the operations violate the broader ceasefire framework established after the US-Iran war, while critics counter that Iran helped create the crisis by insisting Lebanon be included in ceasefire discussions and then backing Hezbollah attacks that prompted Israel's response.
Read the full article here.
By suspending talks with Washington over Israel's campaign in Lebanon, Tehran has raised the stakes of postwar diplomacy and posed a critical question: is it successfully increasing its leverage, or overplaying its hand?
President Donald Trump announced Monday that Israel and Hezbollah had agreed to halt attacks following a flurry of calls with Israeli Prime Minister Benjamin Netanyahu and intermediaries linked to the Iranian-backed group.
Hours earlier, however, Iran suspended talks with Washington, citing Israel's military operations in Lebanon and threatening to open new fronts in the conflict.
The diplomatic turmoil comes as Israel carries out its deepest military operations in Lebanon in more than two decades.
Tehran argues the operations violate the broader ceasefire framework established after the US-Iran war, while critics counter that Iran helped create the crisis by insisting Lebanon be included in ceasefire discussions and then backing Hezbollah attacks that prompted Israel's response.
Turning Lebanon into leverage
For some analysts, Iran's actions suggest a regime that believes it emerged from the war with more leverage than many expected.
"I fear that the Iranians are doing what they're doing because they feel that they have the upper hand," Yaakov Katz, an Israeli-American journalist and author of While Israel Slept, told Iran International.
Katz said Tehran may see itself as having weathered the conflict relatively well. The regime survived, its military remains intact despite significant losses, its nuclear program remains unresolved and Washington is still negotiating with it.
From that perspective, Iran may believe it can broaden the scope of diplomacy beyond its nuclear program and force the United States to account for developments in Lebanon.
That is precisely what concerns Katz.
"It's a disaster to connect the two," he said.
If Washington accepts Lebanon as part of the negotiating framework, Katz argues, Tehran could repeatedly use Hezbollah's confrontation with Israel as leverage whenever future diplomatic disputes arise.
The concern comes as Trump balances two competing objectives: preventing a wider regional war while preserving a diplomatic path with Tehran.
On Monday, Iranian-linked media warned that Tehran could expand pressure to the Bab el-Mandeb Strait, another vital global shipping route, while tensions remain elevated in the Strait of Hormuz. The threats renewed concerns about global energy supplies and the economic fallout from a broader regional confrontation.
The price of Tehran's red lines
Eric Mandel, founder of the Middle East Political and Information Network, believes the Lebanon crisis, threats to maritime shipping and suspension of talks are all part of a broader Iranian strategy.
"This is a coordinated strategy that they are using," he told Iran International. "The biggest part of it is that they are looking to delay."
Mandel argues Tehran is attempting to stretch out negotiations while increasing economic and geopolitical pressure on Washington.
The goal, he says, is to test whether the Trump administration is willing to sustain a prolonged confrontation or whether concerns over oil prices, shipping disruptions and economic instability will eventually force concessions.
He believes Iran benefits from uncertainty.
"I think what Iran wants overall is to create a global recession," Mandel said.
Danny Citrinowicz of Israel's Institute for National Security Studies and former head of the Iran branch in Israeli military intelligence sees the situation somewhat differently.
While Katz and Mandel largely view Tehran's behavior through the lens of leverage and strategy, Citrinowicz argues that ideology remains a central factor.
He says Iran does not view Hezbollah, its missile arsenal and its enrichment program as bargaining chips that can simply be traded away. Rather, they are core pillars of the Islamic Republic.
"They cannot sit aside and not retaliate. That is their mentality," Citrinowicz told Iran International.
From Tehran's perspective, he argues, failing to respond to Israeli operations in Lebanon would amount to abandoning a strategic commitment to Hezbollah and undermining principles the regime considers fundamental to its survival.
That distinction may prove critical as Washington weighs its next move.
For Katz, Iran is attempting to exploit Trump's desire for a deal by transforming Lebanon into a bargaining chip. For Mandel, Tehran is deliberately prolonging the crisis to increase pressure on the United States. For Citrinowicz, Iran's actions are driven less by tactical calculations than by ideological red lines it believes it cannot abandon.
What all three agree on is that Lebanon is no longer a side issue. It has become a central test of the fragile diplomacy between Washington and Tehran.
If Trump pressures Israel to halt operations, Tehran may claim it forced Washington's hand. If he does not, Iran appears prepared to use Lebanon, Hormuz and potentially other fronts to argue that the ceasefire framework has already collapsed.
Either way, Tehran appears willing to increase the costs associated with both diplomacy and confrontation as it seeks to shape the next phase of negotiations.
Iran’s conservative establishment appears to be pushing back against its own ultra-radical fringe after a hardline lawmaker accused President Masoud Pezeshkian of bypassing the Supreme Leader over the April ceasefire with the United States.
Some Iranian hardliners now appear to be distancing themselves from the “extremist” ultraconservatives who have spent recent weeks attacking the president and the nuclear negotiating team.
Two prominent conservative figures with longstanding ties to Iran’s security establishment have publicly condemned hardline MP Kamran Ghazanfari after he accused Pezeshkian of undermining the authority of Supreme Leader Mojtaba Khamenei.
The fallout from these interventions, and from the incident itself, points to a visible fracture inside Iran’s right wing. It highlights the growing fragmentation of the hardline camp and the marginalization of its far-right fringe, a dynamic that may inadvertently provide the embattled president with some political breathing room.
Read the full article here.
Iran’s conservative establishment appears to be pushing back against its own ultra-radical fringe after a hardline lawmaker accused President Masoud Pezeshkian of bypassing the Supreme Leader over the April ceasefire with the United States.
Some Iranian hardliners now appear to be distancing themselves from the “extremist” ultraconservatives who have spent recent weeks attacking the president and the nuclear negotiating team.
Two prominent conservative figures with longstanding ties to Iran’s security establishment have publicly condemned hardline MP Kamran Ghazanfari after he accused Pezeshkian of undermining the authority of Supreme Leader Mojtaba Khamenei.
The fallout from these interventions, and from the incident itself, points to a visible fracture inside Iran’s right wing. It highlights the growing fragmentation of the hardline camp and the marginalization of its far-right fringe, a dynamic that may inadvertently provide the embattled president with some political breathing room.
In a video clip that went viral last week, Ghazanfari accused the president of bypassing the Supreme Leader, demanding: “Why did you accept the ceasefire without Khamenei’s permission?”
He claimed that the Leader’s silence in public messages signaled disapproval and alleged that Pezeshkian had similarly accepted an unauthorized ceasefire during a previous 12-day conflict.
Ghazanfari argued that by halting military operations, Pezeshkian had effectively “saved America and Israel from the crushing blows of Iran’s missiles and drones” just as they were facing destruction.
Ghazanfari's remarks were criticized by hardline commentator Abbas Salimi Namin in an interview with the pro-reform Rouydad 24 website, and by Abdollah Ganji in an editorial in the IRGC-linked Javan newspaper.
The reactions represented unusually sharp internal pushback from within the broader conservative, or principlist, spectrum.
Their target is the extreme and destabilizing fringe of their own camp.
Salimi Namin warned that “extremism damages the system from within.” He argued that the presence of ultra-radicals like Ghazanfari in the parliament is a disaster that alienates the public and degrades political discourse. He also accused radical hardliners of weakening the Supreme Leader’s authority rather than defending it.
“The presence of people like Ghazanfari in the Majles is a disaster,” Salimi Namin said, adding that such statements, “before being an accusation against Pezeshkian, are an insult to the leadership and the armed forces.”
Ganji, who previously served as managing editor of Javan before moving to Hamshahri, made a similar argument in an editorial titled “The Reckless Ghazanfar(s).” The headline used “Ghazanfar,” a colloquial Persian term for a clumsy teammate who scores an own goal, as a pointed play on the MP’s name.
Ganji reminded the “rogue” ultraconservative lawmaker that under Article 110 of the Constitution, decisions on war, peace and major strategic shifts rest with the Supreme Leader and the Supreme National Security Council, not the president.
He described Ghazanfari’s outbursts as “a psychological pathology rather than legitimate political criticism.” He also accused him of exploiting parliamentary questioning as a legal loophole to smear opponents with labels such as “spy,” “Bahai” or “secular.”
Ganji urged “revolutionary youth and elites” to break their silence and “push back against these reckless figures who drive people away from the revolution.”
He characterized Ghazanfari’s accusations as “so disgusting, illogical, insulting, and slanderous… that at first, I thought it was generated by artificial intelligence.”
Both articles unequivocally condemned Ghazanfari’s conspiratorial attacks on Pezeshkian. They argued that although Ghazanfari claims to defend the Revolution and the Leader, his logic ultimately insults the Leader by implying that a president could easily bypass his authority on matters such as striking Israel or agreeing to a ceasefire.
Both warned against mistaking such toxic behavior for revolutionary zeal.
Together, these interventions expose a major structural tension in Iranian politics: how the system manages a reformist or moderate president operating within a conservative-dominated state.
Pezeshkian entered office on a platform of consensus-building, direct engagement with the West to ease sanctions, and domestic de-escalation. The recent criticism of Ghazanfari suggests that mainstream institutional conservatives recognize that, for the system to function, the president must retain at least a basic level of legitimacy.
By attacking the president over core security decisions, the ultra-radicals disrupt the carefully calibrated systemic harmony engineered by the leadership.
The fact that high-profile conservatives are publicly rebuking an ultra-hardline MP indicates that, at this moment, the establishment is prioritizing state stability over factional purity.