Iran says foreign trade shrinks 35% amid US sanctions and Strait of Hormuz blockade

Iranian President Masoud Pezeshkian said Friday that the country’s foreign trade had declined by 35% as US sanctions and a blockade compounded the economic impact of the conflict with Washington.

DUBAI/CAIRO: Iranian President Masoud Pezeshkian said Friday that the country’s foreign trade had declined by 35% as US sanctions and a blockade compounded the economic impact of the conflict with Washington.

The warning came as Iranian leaders acknowledged mounting economic pressures while tensions continued over the Strait of Hormuz, a strategic waterway through which a significant share of global energy supplies passes.

Pezeshkian told Iranian state media that both Iranian exports and imports had fallen 35% because of US sanctions and the blockade.

He said, however, that Iran had managed to sell around 90 million barrels of oil during a short-lived memorandum of understanding signed between Washington and Tehran in June, when the United States permitted Iranian oil sales.

The latest economic warnings came as Washington stepped up financial pressure on Tehran under what the administration has described as an “economic D-Day”.

The United States has warned countries against doing business with Iran through the threat of secondary sanctions, although the US Treasury Department has stopped short of imposing penalties on major Iranian trading partners such as China and India, moves that could have wider repercussions for the US and global economies.

Washington has also imposed sanctions on Egypt’s Banque Misr over business dealings with Tehran, restricting its branches in the United Arab Emirates from conducting dollar transactions.

Egypt’s central bank said it and the foreign ministry were in contact with US officials over the measure, adding that it was limited to Banque Misr UAE’s US dollar transactions with correspondent banks.

The US Treasury separately announced sanctions targeting an entity based in Hong Kong and an individual linked to Iran’s Bank Melli.

The sanctions campaign has added to pressure on Iran’s economy, with annual inflation reaching 66% last month.

Iran’s Supreme Leader Ayatollah Mojtaba Khamenei called on the government to address the country’s economic difficulties.

“There is the need to seriously address the chain of economic and livelihood challenges, such as inflation, unemployment, management of prices and the market for goods and services,” Khamenei said in a written statement.

Meanwhile, tensions remained high over the Strait of Hormuz, with Iranian officials insisting that Tehran retains the ability to restrict shipping through the strategic waterway.

Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani met Iranian leaders in Tehran on Thursday and said he had stressed the importance of restoring open shipping through the strait to its pre-war status.

Iranian Foreign Minister Abbas Araqchi described the talks with Al Thani as “creative”.

Qatar, a US ally and Gulf neighbour of Iran, and Pakistan helped broker the June memorandum of understanding that resulted in a brief ceasefire before disagreements over the Strait of Hormuz caused the arrangement to unravel.

US military commanders have said American forces cleared sea mines from the strait that had allegedly been laid months earlier by Iran’s Islamic Revolutionary Guard Corps.

US President Donald Trump has repeatedly said the waterway is open. The IRGC navy, however, rejected the claim, saying it was “an obvious lie” and maintaining that the strait remained closed to ships without Iranian permission.

Preliminary shipping data released Friday showed that only seven commodity vessels transited the Strait of Hormuz on Thursday, down from 17 a day earlier and below the 10-day average of 15.