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Oil flow being adjusted at the Soroush oil field south of Tehran. Image Credit: Reuters

Although the US has been seeking to zero out Iranian oil exports from the beginning of May, violations have hampered these efforts, as was expected. According to Reuters data, Iranian oil exports plummeted last month to just 400,000 barrels per day, compared to 1.5 million barrels per day in April.

This means Iran still exports oil using twisted ways, as the governor of the Central Bank of Iran, Abdul Nasser Hamati, said last week, “The US sought to cut down Iran’s sales of oil, but we found a practical way and some methods to get our oil revenues, so that Washington cannot influence it.”

There is certainly exaggeration in Hamati’s statement, but there is also a chance for Iran to bypass the sanctions and find alternative outlets for its smuggled oil. Firstly, thanks to past experiences, Iran has been able to find ways to circumvent sanctions, especially through neighbouring countries, such as Iraq, Afghanistan and others. But maritime cargoes are almost all suspended, with oil tankers loaded at Iranian ports awaiting buyers.

The other possibility is that some countries, which have declared a commitment to boycotting Iranian oil, have not practically done so. They instead found alternative — and crooked ways — to import Iranian oil, or are doing so through regional ports in Iraq by changing certificates of origin, or by smuggling small, but steady, amounts of oil to loading centres.

The other reason for the relatively large volume of exports in May could be to give more time to the mullah regime to think through its destabilising policies in the region, stop interventions in the internal affairs of other countries, as well as reconsider its nuclear and missile program.

In all cases, we are so far facing an incomplete scenario with regard to the depletion of Iran’s oil exports. Observers expect June’s oil export data to become clearer, especially as it coincides with other sanctions coming into effect, covering Iranian metal exports, including aluminium and iron, which are worth $3.5 billion and represent 8.5 per cent of Iran’s total non-oil exports.

This is a significant proportion that would seriously damage a vital sector and an important source of foreign exchange. It would be difficult for Iran to circumvent US sanctions imposed on such sectors. The export of these materials is not as easy as with crude oil, which is available at more than one level.

Even before imposing the sanctions on aluminium and iron exports, Iran’s trade exchange with many countries were severely affected. Being one of Iran’s most important trade partners, Germany’s imports from Iran halved to 340 million euros in the first quarter compared to last year. The number of German companies operating in Iran also dropped by half during the same period to 60 companies.

Excluding metal exports, Iran has another, more important, source of foreign currency — its petrochemical exports, which account for the bulk of total non-oil exports. These are not covered by the US sanctions so far, which throws a lifeline to Iran and help it continue its intransigence against the international community.

It also gives Iran the opportunity to pursue its nuclear and missile programme and interfere in the internal affairs of others. This comes in line with its ideology, which focuses on exporting a revolution that caused enormous losses to the Iranian people who mostly live below the poverty line in a country that enjoys multiple resources.

In the next few weeks, everything will be clear, including the seriousness and impact of US sanctions, and whether or not Iranian oil exports will be cut down to zero. Anyway, the result will be either Iran’s compliance and responding to peace efforts and to international norms, or going ahead with its chauvinist and sectarian agenda.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.