Accurate trade data concerning Iran’s economy remains elusive due to inconsistent reporting and deliberate understatements by both Iran and its trading partners. Nevertheless, available information reveals significant shifts in Iran’s commercial landscape over the past three decades, illustrating its capacity to adapt amid sanctions and geopolitical pressures.

China has emerged as Iran’s dominant trade partner, with its share of Iran's imports and exports expanding steadily over the past 20 years. The relationship deepened during the COVID-19 pandemic when China pledged to invest $400 billion in Iran over coming decades, securing a consistent oil supply. In 2024, China reportedly purchased approximately 90 percent of Iran’s oil exports, according to the International Energy Agency. Beyond oil, China has been a major buyer of Iranian non-oil products, including chemicals and metals, making up about 25 percent of Iran’s non-oil exports between 2019 and 2024, data from the Atlas of Economic Complexity at Harvard University indicate. Trade transactions are frequently settled in renminbi to circumvent U.S. dollar-based financial channels and the risk of sanctions enforcement through American banks.

In addition to formal trade, Iran and China engage in a complex barter arrangement involving covert financial channels. This arrangement includes Iran supplying oil in exchange for Chinese state-backed infrastructure projects, such as airport development. Experts highlight that such clandestine trading practices extend beyond Sino-Iranian commerce, employing shell companies, third-country intermediaries, and non-Iranian banks to conceal Iranian involvement and evade sanctions.

Historically reliant on petroleum—accounting for nearly 80 percent of exports two decades ago—Iran’s economy has gradually diversified, particularly after the tightening of U.S. sanctions in the early 2010s. After falling sharply amid measures introduced under President Barack Obama, Iran’s exports shifted toward non-oil commodities, expanding trade partnerships beyond Western countries. The partial easing of sanctions following the 2015 Iran nuclear agreement was reversed in 2019, as sanctions were reimposed by the Trump administration, compelling Iran to further develop non-petroleum trade avenues.

Since 2019, Iran’s non-oil exports have surpassed $120 billion, a volume comparable to the total exports of some mid-sized economies like Costa Rica or Croatia. Iran benefits from multiple regional trade corridors, sharing borders with seven countries, including Iraq, Turkey, Pakistan, and Afghanistan, alongside access to the Caspian Sea and control over part of the strategic Strait of Hormuz—a focal point amid ongoing regional conflicts. Turkey and Iraq are significant customers of Iranian goods, with China, both nations combined, accounting for over half of Iran’s non-oil exports during this period.

In addition, Middle Eastern countries such as Kuwait import Iranian cement and livestock, while Central Asian nations including Kazakhstan, Uzbekistan, and Bulgaria are key importers of Iranian packaging materials. Iran also remains a principal supplier of saffron to Spain.

Domestically, Iran has bolstered its manufacturing sector in response to sanctions, fostering industries in automotive production, steel, electronics, pharmaceuticals, and food products. This industrial growth partly offsets reduced imports from Europe, which once supplied more than half of Iran’s imported goods in the mid-1990s but now represent less than 20 percent.

Overall, Iran’s economy exhibits resilience through diversification, expanded trade partnerships, and inventive approaches to circumvent sanctions, underscoring its evolving role in regional and global markets despite ongoing international restrictions.