Iran President Hassan Rouhani with Chinese counterpart Xi Jinping, Xingdao, China, June 2018
Iran’s exports to China plummeted almost 53% in the first quarter of 2020, compared to the previous year.
Tehran’s sales sank to an all-time low of $1.8 billion. Meanwhile, Chinese trade figures on Friday showed that Beijing’s exports to the Islamic Republic grew 16%, reaching more than $2.1 billion, compared to the same period in 2019.
Iran’s trade deficit with China was the first in decades.
China’s purchases have been curbed amid comprehensive US sanctions imposed in November 2018. Beijing is Iran’s largest customer, but Tehran’s oil exports have fallen between 80% and 95% since April 2018.
In January, the Trump Administration sanctioned several Chinese entities for oil purchases. The Administration’s envoy for Iran, Brian Hook, said, “As long as they’re funding Iran’s terrorism through oil purchases, the Middle East is going to be unstable.”
Before the US sanctions, China purchased about 700,000 barrels of oil per day from Iran, but by autumn 2019, analysts said imports were down to less than 200,000 bpd.
The International Monetary Fund has forecast Iran’s trade deficit at $18 billion trade deficit this year.
The situation has worsened because of Coronavirus and a collapsing global oil price. The IMF now forecasts that Iran’s GDP will contract by 11% this year.