Iran's Trade with Neighbors: Sanctions’ Impact and the Alternatives

Abstract

This article investigates whether sanctions have changed or influenced Iran's trade patterns, focusing on neighboring countries. The study concentrates first on the United Arab Emirates (UAE), considered Iran's main regional partner. We hypothesize that the sanctions should have had a negative impact on Iran's trade with the UAE, as the latter cooperated with US policies toward the Islamic Republic. By contrast, sanctions were likely to positively influence its trade with Qatar. Indeed, the research shows that Iranian trade with Qatar increased significantly after 2017, while its trade with the UAE declined as a result of the measures adopted toward Iranian businesses in Dubai. However, the results also indicate that despite the UAE's anti-Iranian stance, the country still constitutes a major trading partner for the Islamic Republic, which is trying to mitigate the paralyzing impact of sanctions by developing trade relations with Qatar and other countries, such as Turkey.