Trump's Iran Threat Puts Key Trading Partners in the Spotlight

US President Donald Trump's warning of "unprecedented economic warfare" and isolation against Iran has put the spotlight on the nations that continue to do business with Tehran. The threat of secondary sanctions could have significant consequences for several key economies.

China

China remains the largest buyer of Iranian crude, with over 80% of Iran's shipped oil destined for Chinese ports. Independent Chinese refiners, which have little exposure to the US financial system, have built a ring-fenced system to process this oil. They often use a complex chain of intermediaries and settle transactions in Chinese currency, with cargoes frequently re-branded as originating from Malaysia or Indonesia. The US Treasury has already sanctioned one Chinese refinery this year for such purchases. Beijing has publicly pushed back, with foreign ministry spokesperson Lin Jian stating that "sanctions and pressure will not solve the problem" and calling for political and diplomatic resolution.

United Arab Emirates

The UAE has long served as a critical economic lifeline for Iran, with Dubai's banks historically holding substantial Iranian-linked deposits. In 2024, the UAE provided 30% of Iran's imports, valued at $21 billion, and accounted for 13% of its exports. However, this week the UAE suspended all financial and economic transactions with Iran, citing a military escalation by Tehran, a move that highlights the fraught nature of the relationship.

Turkey

Turkey maintains significant economic ties with Iran, importing natural gas and exporting manufactured goods. Bilateral trade stands at around $5-6 billion annually. Iran provides 13% of Turkey's natural gas imports, a critical supply for a country that relies on imports for nearly all its consumption. Ankara has shown no sign of curtailing this commerce.

Iraq

Iraq's trade with Iran exceeded $10 billion in 2025, driven largely by Iranian exports of food and consumer goods. However, trade has declined since the start of the Iran war due to regional security risks and border disruptions. Energy remains a cornerstone, with Iraq paying $4-5 billion annually for Iranian natural gas used in electricity generation. Iraqi officials warn that new US sanctions could create significant challenges for maintaining these payments.

Oman

Oman has historically maintained cordial ties with Iran and often acts as a mediator. Trade in goods between the two countries totalled $1.5 billion in 2025, with $345 million recorded in the first four months of this year.

Pakistan

Analysts say US action could be a serious setback for Pakistan, which has committed to expanding bilateral trade with Iran to $10 billion. While formal trade has been limited, informal channels have driven exports and imports to an estimated $4 billion, covering goods like oil, wheat, rice, and medicines.

India

India's trade with Iran has plummeted since Washington re-imposed sanctions in 2020. Two-way trade fell from $17 billion in 2018-19 to $4.8 billion the following year, and stood at just $1.63 billion in the fiscal year 2025/26. Indian exports, primarily cereals, tea, coffee, and spices, make up the bulk of this trade. New Delhi has argued these exports are on humanitarian grounds and should be exempt from sanctions.

Armenia and Azerbaijan

Iran is also a notable trade partner for its neighbours in the Caucasus. Iran accounted for 3.6% of Armenia's total trade turnover in 2025, with a "gas for electricity" swap agreement in place. Azerbaijan's trade with Iran rose 4.5% in the first half of 2026 to $312.6 million, with Iran accounting for 3.56% of Azerbaijan's total imports.