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Trade with China has fallen to roughly a quarter of last year’s level by one measure, while commerce with Turkey, India and the European Union has also contracted sharply as war and disruption in the Strait of Hormuz reshape Iran’s foreign trade.

Mohammad-Sadegh Ghanadzadeh, a senior official at Iran’s Trade Promotion Organization, said both non-oil exports and imports fell by roughly 30% during the first four months of the current fiscal year, from March 21 to July 22.

The government has stopped regularly publishing detailed foreign trade statistics since the war began, making a fuller assessment difficult.

Iranian customs data show the country recorded slightly more than $34 billion in non-oil trade during the same four-month period last year, including $15 billion in exports.

China trade plunges

China is Iran’s largest trading partner, accounting for roughly one-third of the country’s non-oil foreign trade.

Chinese data put non-oil bilateral trade at around $10 billion in 2025—substantially lower than Iranian figures, in part because the two countries classify and record parts of their trade differently, including sanctioned Iranian commodities.

According to Chinese customs records, trade with Iran totaled less than $823 million during the first four months of the war, from March through June. That is roughly one-quarter of the level recorded during the same period a year earlier.

The disruption has also sharply increased transportation costs.

Majidreza Hariri, chairman of the Iran-China Chamber of Commerce, said transporting goods from China to Iran by sea or land now costs four times as much as before the war, with shipping a container costing as much as $13,000.

Major partners hit harder

Trade with several of Iran’s other major partners has also contracted sharply.

The United Arab Emirates, Iran’s second-largest trading partner, has largely halted trade with Tehran. Before the war, annual trade between Iran and the UAE stood at around $27 billion, about 80% of it Emirati exports to Iran.

The precise impact on trade with Iraq, Iran’s third-largest trading partner, remains unclear. But official data from Turkey, its fourth largest, show Turkish exports to Iran fell by almost half between March and June to around $716 million, while imports from Iran dropped 37% to $907 million.

India has recorded a similar decline. Its exports to Iran fell by around 60% during the first four months of the war to approximately $150 million.

Indian imports from Iran moved sharply in the opposite direction, reaching around $1 billion in the first half of the year — four times the level recorded during the same period last year—after India bought several shipments of Iranian crude oil and liquefied petroleum gas.

Health Minister Mohammad-Reza Zafarghandi recently said India, Iran’s largest supplier of pharmaceutical raw materials, had stopped shipments after the IRGC closed the Strait of Hormuz.

He said India had made the resumption of pharmaceutical exports conditional on free passage for Indian vessels through the waterway.

Where has the trade gone?

Taken together, available data suggest Iran’s trade with several of its largest established partners has contracted substantially more than the 30% overall decline reported by Tehran.

The discrepancy suggests commerce with other countries may have partly cushioned those losses.

Russia, Pakistan, Iraq, Afghanistan and Central Asian states are among the possible destinations, though the absence of regularly published Iranian customs figures makes it difficult to establish how much trade has shifted or where.

The broader picture nevertheless shows the economic fallout from the war extending well beyond Iran’s oil exports, weakening some of Tehran’s most important commercial relationships even as the full extent of the shift remains obscured by the lack of detailed Iranian data.

The Strait of Hormuz was unusually quiet Friday, with shipping traffic near a standstill. Hours later, as the day turned to Saturday in Iran, President Donald Trump said in New York that he may soon declare the strategic waterway “a territory of the United States,” drawing an immediate assertion from Tehran that the strait remains Iranian and under its command.

“Pretty soon I’ll be declaring the Strait of Hormuz a territory of the United States,” Trump said during remarks at the Police Academy Center for Training and Intelligence.

Deputy Foreign Minister Kazem Gharibabadi responded that Iran would decide when the strait opened or closed and would continue what he described as its blockade until Washington accepted its “strategic defeat.”

“The Strait of Hormuz has been Iranian, is Iranian, and will remain Iranian,” Gharibabadi wrote on X, adding that the waterway would be “closed and opened under Iran’s command.”

Hormuz traffic nearly stops

The competing claims over the waterway came as actual traffic through it fell to extremely low levels.

Kpler data showed only two vessels passed through the Strait of Hormuz on Friday, with no crude oil shipments visible.

Nine vessels crossed Thursday and five Wednesday, compared with an August average of 12. More than 130 ships traversed the strait daily before the US-Israeli war on Iran began in February.

US Central Command said Friday that its forces had redirected 62 commercial vessels, disabled three and boarded two as of Aug. 14 while enforcing the US blockade against Iran.

Secretary of War Pete Hegseth said Thursday that the United States could maintain that blockade “indefinitely” by rotating ships in and out.

Oil prices also rose Friday as faltering efforts to end the Iran war and the prospect of an extended blockade kept geopolitical risks elevated. Brent crude gained 0.7% to $87.68 a barrel, while US crude rose 0.3% to $81.49.

Pressure grows as talks remain unsettled

Washington also kept up its economic pressure on Tehran. Trump highlighted Treasury Secretary Scott Bessent’s remarks on “unprecedented economic isolation” for Iran by sharing a Newsmax report on Truth Social. Bessent said Thursday that the United States would apply measures against Iran that had “never been seen.”

Canada added sanctions Friday on five Iranian officials over activities it said obstructed navigation rights in and around the Strait of Hormuz. Global Affairs Canada said the measures targeted senior officials, including members of the IRGC, involved in military, legal and communications activities linked to threats against the waterway. Tehran, meanwhile, stopped short of committing to renewed negotiations.

Foreign Minister Abbas Araghchi said Friday that no decision had been made to resume talks with Washington, semi-official ISNA reported.

He said Qatar and Pakistan were continuing to exchange messages and remain in contact with Iran, but stressed that this “does not mean negotiations.”

Araghchi also said the Islamabad memorandum of understanding referred to an “end to the war,” rather than a ceasefire, rejecting the idea that there was a 60-day truce requiring an extension. He said previous diplomatic channels were no longer effective and that Iran was working on a temporary path that could later develop into a final framework.

Pakistan continued to push implementation of the June 18 Islamabad memorandum, with Foreign Minister Ishaq Dar calling it the “only way forward.” Iraq also said Friday it was negotiating with both the United States and Iran to secure passage of its oil exports through Hormuz.

The waterway itself was nearly still Friday, but the dispute over who controls it was not. Washington is sustaining military and economic pressure, Tehran is asserting authority over passage through the strait, and neither side has yet moved back into formal negotiations.

Tehran is likely to wake Saturday to a new round of official and media reactions to Trump’s remarks on Hormuz, just as much of the West heads into a summer weekend.

The resignation of Mohammad Bagher Zolghadr, the former deputy commander-in-chief of the Islamic Revolutionary Guard Corps (IRGC), from the SNSC positions his tenure as secretary as the shortest in the history of the Islamic Republic.

Zolghadr was demoted, becoming a political advisor to the supreme leader. Rezaei's appointment demonstrates both the militarization and fragmentation of the Islamic Republic’s elite.

The careers of Rezaei and Zolghadr have multiple parallels. Zolghadr served under Rezaei when he was commander-in-chief of the IRGC. Zolghadr was Rezaei’s chief of the IRGC’s joint staff.

Both men later became secretary of the Expediency Council, which advises the supreme leader and arbitrates disputes between parliament and the Guardian Council, after their long tenures in the IRGC’s top brass. The Expediency Council has traditionally been used by Iran’s supreme leaders as a landing spot for the old guard after service in more consequential positions.

The return of these figures to Iran’s top ranks reflects the hollowing out of the Islamic Republic’s military leadership following US and Israeli airstrikes in 2025 and 2026.

This is not Rezaei’s first stint on the SNSC. As commander-in-chief of the IRGC, he served as an SNSC member. But the last time he was officially part of its deliberations was in 1997.

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In becoming secretary of the SNSC, he is the first former IRGC commander-in-chief to serve as secretary. He joins Ahmad Vahidi, the current IRGC chief, who was Quds Force commander under Rezaei’s tenure at the helm of the Guards, who holds a seat on the SNSC.

Rezaei also has a long history with another SNSC member Speaker of Parliament Mohammad Bagher Ghalibaf, who rose through the ranks of the IRGC—as deputy commander of the fearsome Basij and commander of the Khatam al-Anbiya Construction Headquarters—under Rezaei’s leadership. In 1997, when Rezaei departed from the IRGC’s top position, Ghalibaf signed a letter to Rezaei praising him as a “mentor.”

Both Ghalibaf and Rezaei have also been political rivals, unsuccessfully running against each other as candidates for president, for example in 2013. With a supreme leader who has largely been inaccessible and invisible to most in Iran, this sets-up the prospect of clashes within the SNSC, especially as both men have seen themselves as destined for higher office.

Like Zolghadr, Rezaei is also a hardline actor. But Rezaei has exhibited more political competitiveness than his predecessor, having run for office whereas Zolghadr spent most of his career embedded in military and security institutions.

Ghalibaf, however, could be bolstered on the SNSC with the appointment of Ali Abdollahi as chief of staff of Iran’s Armed Forces. Abdollahi served as a longtime deputy of Ghalibaf, when Ghalibaf headed the IRGC’s Air Force and Iran’s Police. Therefore, while Rezaei’s appointment can be seen as a check on Ghalibaf, the latter is not necessarily losing his influence.

Rezaei’s appointment as SNSC secretary is also likely a blow to President Masoud Pezeshkian. Traditionally, despite presidential decrees appointing the SNSC secretary, in practice, the supreme leader decides the fate of the position.

Given Rezaei’s being a longtime fixture in conservative politics in Iran, it can be safely assumed that he was not the reformist Pezeshkian’s first choice for the position. These dynamics further marginalize Pezeshkian and his Foreign Minister Abbas Araghchi. Just days ago, Iranian media reported that Pezeshkian had refused Zolghadr’s resignation as SNSC secretary.

Rezaei’s views may also lead to disagreements with Pezeshkian’s camp, which is more focused on returning to the MOU than dragging negotiations out to build deterrence and achieve a better deal.

In a 2015 state television appearance, Rezaei proclaimed that “we’ll take 1,000 Americans hostage. America will have to pay several billions to get every single one freed. This is how we can solve our economic problems.”

Rezaei’s ascension continues the trend of the SNSC being populated by men steeped in asymmetric tactics against the United States, like terrorism. Zolghadr previously commanded the IRGC’s Ramadan Headquarters which later morphed into the Quds Force.

Rezaei oversaw a particularly active period of IRGC terror plots when he was leading the IRGC—for example the bombings of the Israeli embassy in Argentina in 1992, a Jewish community center in Buenos Aires in 1994, and Khobar Towers in Saudi Arabia which killed 19 American servicemembers in 1996.

INTERPOL issued a Red Notice for Rezaei at Argentina’s request over his alleged involvement in the 1994 AMIA bombing.

Vahidi also participated in the deliberations which led to these attacks and was likewise the suject of an INTERPOL Red Notice. Thus, Iran’s SNSC will now feature two men who are the subject of an INTERPOL Red Notice.

Before, especially under Ali Khamenei’s tenure, softer faces more palatable to the international community served as secretary. Now, the Islamic Republic is broadcasting the rogue nature of the regime—a signal of its overconfidence, which is dangerous.

This raises questions over Iran’s future trajectory with respect to developing nuclear weapons—especially as it’s using the tussle over the Strait of Hormuz as a shield from having to make concessions on its nuclear program.

When he was commander-in-chief of the IRGC, Rezaei was quoted in a 1988 assessment sent to Akbar Hashemi Rafsanjani and later relayed to then-Supreme Leader Ruhollah Khomeini as suggesting that nuclear weapons, among other arms, would be needed if Khomeini chose to continue the Iran-Iraq War, which was depleting the Iranian state.

He did recognize the limits of the Islamic Republic’s power at the time—reportedly telling Khomeini that “there are no victories forthcoming in the next five years” without such weaponry. Although, for now, Rezaei appears content with leveraging the Strait of Hormuz, dubbing Iran’s control over it “more important than dozens of nuclear bombs.”

In the end, Rezaei’s ascension may lead to growing disagreements within the Islamic Republic’s establishment. It also reflects the continued domination—which started before the war—of the IRGC in decision-making.

Rezaei’s predecessors as secretary of the pre-war SNSC, include Ali Shamkhani, who headed the IRGC’s Navy, and Ali Akbar Ahmadian, a longtime IRGC commander himself. Rezaei being elevated at this time is telling given his role in past crises during wartime.

100%

The debate comes amid speculation that the 60-day arrangement agreed with the United States could be extended by another 30 to 60 days, while Oman continues efforts to broker a temporary reopening of the waterway.

An ILNA report published less than a week before the deadline cited diplomatic sources as saying the atmosphere surrounding the talks had become more positive, though no final agreement had been reached.

The proposed arrangement would not constitute a broader political settlement, but a temporary de-escalation mechanism allowing commercial shipping to resume under monitored conditions.

One source described it as a “technical and security understanding,” with shipping lanes potentially restored in phases.

A ‘golden opportunity’

The possibility of even a temporary reopening has prompted debate in Tehran over how Iran should use what some commentators describe as a “60-day golden opportunity.”

Writing in the moderate Etemad newspaper, Hossein Salahvarzi argued that any easing of tensions would provide a narrow but valuable chance to stabilize trade after months of disruption.

Political de-escalation alone, he warned, would not restore normal commerce. Ships must be willing to enter the region, insurers must accept the risks, freight rates must fall and ports must be able to handle incoming cargo.

Salahvarzi urged authorities to prioritize imports of medicine, grain, livestock feed, critical spare parts and industrial inputs, warning that without clear planning, essential goods could remain stuck in bureaucratic queues until the window closes.

The argument reflects a wider sense of urgency in Iranian coverage, with any reopening increasingly portrayed as a temporary opportunity rather than the beginning of a durable return to normal trade.

ILNA similarly noted that even a short period of stability could reduce freight and insurance costs and ease pressure on essential imports.

Hardliners resist reopening

But the prospect of reopening Hormuz continues to face strong political resistance in Tehran.

Hardline lawmakers on Thursday dismissed the chances of arrangements negotiated with Omani and Pakistani intermediaries succeeding and insisted that the strait should remain closed.

Foreign Ministry officials have also publicly expressed doubts over whether the mediation will produce an agreement.

The competing positions expose a broader disagreement over how Iran should use its remaining leverage over Hormuz: whether to exploit a temporary opening to relieve pressure on its economy or preserve restrictions on shipping as a bargaining tool in negotiations with Washington.

ILNA said Oman had been mediating intensively on a temporary arrangement, while Persian Gulf Arab states, China and Pakistan were also pushing for de-escalation because of the disruption to regional trade.

“No country in the region benefits from a closed Hormuz,” the agency quoted a diplomatic source as saying.

Any agreement would nevertheless remain conditional and reversible, with deep mistrust between Tehran and Washington leaving it vulnerable to another military incident.

For those urging Tehran to seize the opportunity, that uncertainty is precisely the point. A temporary reopening would offer Iran a chance to replenish essential supplies and ease pressure on trade, but with little confidence that calmer conditions in the Persian Gulf will last.

The setting was routine government business: a signing ceremony between two ministries, with footage showing Araghchi alongside Health Minister Mohammad-Reza Zafarghandi. The headline strap announced an agreement between the ministries of health and, in Persian, khavarejeh, Kharijite affairs, instead of kharejeh, foreign affairs. The difference is a single letter vav. A screenshot was circulating within minutes.

Within hours, the strap was a national argument. "Abbas isn't the foreign minister anymore. He's the minister of the Kharijites now," one widely shared post said of the man leading Iran's talks with Washington.

Another user drew the lineage: "Zarif was America's foreign minister. This one turned out to be the Kharijites'." Mohammad Javad Zarif, the architect of the 2015 nuclear deal, spent years being mocked with that title by the broadcaster's favorite guests; to many, the strap was the same insult upgraded, from serving the enemy to heresy.

The reformist daily Etemad asked the question on everyone's screen: "Mistake or mischief?" One viral post refused the innocent reading outright: "With this budget, this many staff, editors, broadcast supervisors and layer after layer of managers, you don't get to say 'it was a typo.'" The post tagged Peyman Jebelli, the broadcaster's hardline chief.

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The deadliest word in the lexicon

The name Kharijites means "those who went out," and the story behind it is Islam's first civil war, remembered as the First Fitna. In 657 AD, at the Battle of Siffin, followers of Imam Ali, the first imam of Shia Islam, pressed him to accept arbitration with his rival Muawiya rather than fight on. When the arbitration went badly, the same men turned on Ali for accepting it, declared that "judgment belongs to God alone," walked out of his camp and made war on him. Ali crushed them at Nahrawan; three years later, a Kharijite assassin's poisoned blade killed him at prayer.

In the Islamic Republic's political language, no insult reaches deeper. "Kharijite" means the traitor within, the pious-faced insider who deserts the rightful leader, the author of fitna, the sedition that splits the faithful.

The late supreme leader Ali Khamenei's own commemorations dwelt on Nahrawan as the hardest of Ali's wars, fought against old companions whose foreheads were calloused from prayer, and his loyalists spent the years after the 2009 protests hanging the word on the opposition.

One user reached for exactly that memory this week, asking a government supporter: "So does your definition cover 2005 and 2009 as well?"

The alibi written into the alphabet

The typo has a linguistically respectable defense, which is part of what makes the episode so perfectly Iranian. Persian preserves a silent vav in a handful of ancient words, a fossil of pronunciation lost a thousand years ago: "sister" is written khvahar but said khahar. A typist's hand trained on those spellings could, in theory, plant the ghost letter in kharejeh on autopilot.

The defenders made that case. "It's a typo, not sabotage. Stop making a mountain out of a molehill," one wrote. Another blamed simple ignorance, at the establishment's expense: "Pure illiteracy at the mullahs' broadcaster. They figured if 'sister' takes the silent vav, 'foreign' must take one too."

The skeptics' answer was the broadcaster's record, which is where the story stops being about spelling.

A seminar, then a knife fight

What happened next may be the most Iranian part of all: the country fell into a theological flame war over the year 657, conducted in quote-tweets, as a proxy for a live question of war and peace.

One camp insisted the label fits the diplomats. "The Kharijites were the negotiation camp. That's the historical record," one post read. Another cast Araghchi in an even older role: "He's standing right where Amr ibn al-As stood, and his caliph is Muawiya," a reference to the silver-tongued arbitrator who outfoxed Ali's side at the table.

The rival camp threw the word back across the aisle. "The Kharijites were the ones pushing the imam into talks with the devil, and when it all went wrong, they blamed the imam," one wrote, a reading with a sharp contemporary edge, since hardline media have spent recent weeks portraying Supreme Leader Mojtaba Khamenei as having opposed the negotiating process that produced the Islamabad agreement.

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Another user completed the thought: "The Kharijites were inside Ali's own government. They kept pressuring him to negotiate, and when the whole thing blew up, they said: we had nothing to do with it."

Others turned the word on the broadcaster's own patrons: "If anyone here fits the Kharijites, it's Jalili and his gang. Extremism is all they've got." A government supporter fired back: "If only you people read some history. The Kharijites were the ones with no seat at the table, endlessly kicking at the government of the day to get one. Exactly like you."

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And beneath the seminar, a threat. One account declared "the Kharijites' coup is near," amplifying a post that urged toppling President Masoud Pezeshkian's government before, it said, the government topples the system.

The broadcaster with a record

The reason so few Iranians extend the benefit of the doubt is that the strap did not appear on a neutral screen.

The Islamic Republic of Iran Broadcasting is run by Jebelli and his cultural deputy Vahid Jalili, the brother of Saeed Jalili, the hardline politician who styles his circle a shadow government, and it has spent months in open warfare with the state's own diplomats.

In recent weeks alone, the broadcaster censored Pezeshkian's disclosure that the late supreme leader had privately ordered officials to negotiate with Washington while publicly ruling talks out; cut short a live interview with parliament speaker and chief negotiator Mohammad Bagher Ghalibaf; ignored a formal order from its own supervisory board to stop censoring senior officials; and answered a complaint from Araghchi with a sneer that it could not give him "24/7 coverage."

The timing gives the letter a forward edge. Jebelli's five-year term expires within weeks, and whether the new supreme leader reappoints the current management has become an early test of the postwar balance between the war camp and the talks camp.

A one-letter insult to the chief diplomat, aired on Jebelli's channels while his renewal hangs in the balance, is either spectacular carelessness or a message about who does not fear the outcome.

One establishment, two masks

A caution belongs here, and some Iranians supplied it themselves. The fight between the broadcaster and the diplomats is real enough to produce casualties, but the moderate-versus-hardliner frame is also the Islamic Republic's most exportable fiction; every actor in this drama supports the system, and the menace of one camp has always been useful to the bargaining of the other.

As one user put it: "It's an open division of labor. America and Israel attack from the outside, the Ahmadinejad crowd and the shadow government undermine from the inside."

A typo that cannot be proven deliberate is the perfect weapon for a factional war that cannot be proven real.

In Persian, the silent vav is written but never pronounced. On Iranian state television, it was the only letter that spoke.