Every country and industry has at least one great asset to fend off the competition and when you understand what the asset is, you can understand how it can handle competition. In the case of Iran, the biggest asset is oil.

In an article written by Patricia Cohen and Robert Gebeloff of the New York Times News Service, how does Iran which as one of the world’s largest reserves of oil, but is on the sanction list of many developed countries continue to function as a country.

Iran has traded with 190 countries since 2019, when the international restrictions were imposed. Overall trade is down, but the country has imported much needed food, electronics and auto parts while it sells oil, gas, construction materials, specialty foods and thousands of other products.

The expectations is that sanctions have isolated Iran from global trade but that is not entirely the case. Iran’s trade has grown more complex over time in response to sanctions.

Trade date over the past 30 years may offer clues about the Iranian economy. Its ability to adapt under the strain of sanctions and disruptions could signal how it would operate going forward.

Precise trade figures are difficult to obtain, however China has stepped up as Iran’s biggest trading partner. During the pandemic, China invested $400 billion in exchange for a steady supply of oil. In 2024, China purchased 90% of Iran’s oil exports.

China also accounted for 25% of Iran’s non-oil exports from 2019 to 2024. Payments are made in renminbi, China’s currency avoiding the use of dollars and the need to involve US banks. China appears to provide nearly 30% of the commodities Iran imports selling everything from furniture to sunflower seeds.

Both countries use a barter system whereby China receives oil from Iran and in return Chinese state-backed companies build Iran’s infrastructure from airports to roads.

Iran’s economy has been diversifying from oil, although heavily dependent on oil, to exporting $120 billion in non-petroleum commodities, according to data from Harvard university’s Atlas of Economic Complexity.

Iran is helped by its geographical location to several trade corridors, as it borders 7 countries including Pakistan, Afghanistaon, Iraq and Turkey. Iran was access to the Caspian Sea as well as the Persian Gul and Strait of Hormuz.

Iran’s 3 biggest trading customers are China, Turkey and Iraq accounting for over 50% of Iran’s non-oil export trade since 2019.

Kuwait is a major buyer of cement and sheep. Bulgaria, Kazakhstan and Uzbekistan import large quantities of packaging materials. Most of saffron in Spain comes from Iran.

Since the sanctions, internally Iran has developed an extensive manufacturing sector that produces automobiles, steel, iron, electronics and pharmaceuticals as well as food products.

In the mid-1990’s European countries accounted for 50% of Iranian exports, now it is less than 20%.

Linking to dividend paying stocks, every country or industry has some assets, when sanctions happen there will be an adjustment and it takes time to accomplish. For Iran, it can sell oil and received goods to keep its economy for the average person in the country functioning. Any country that is isolated will start to do more things internally, sometimes it is better, sometimes not so good. For every problem there are solutions, sometimes there is an easy way, sometimes there is a harder way, but a solution can be found.

There are more questions than answers, till the next time – to raising questions.