Trump's impasse on Iran petrochemical sanctions

According to Ashura News, quoted by Mehr News Agency, with Donald Trump entering the White House as expected, a new round of US sanctions against Iran’s oil and petrochemical export sector began. Tommy Bruce, a spokesman for the US Department of State, announced: The US Treasury Department has sanctioned 16 entities and vessels, while the Departments of State and Treasury have jointly sanctioned 22 other individuals and 13 vessels. When we examine this sanction, we see that the US has sought to sanction the logistics of Iran’s oil and petrochemical exports.

The US Treasury Department had previously expanded targeted sanctions related to Iran’s oil and petrochemical sectors in a decision dated October 11, 2024, as stated in its press release titled Response to Iran’s October 1st Attack on the Zionist Regime.

In this regard, it was recently observed in cyberspace that Mohammad Reza Heydarzadeh, the CEO of one of the country's petrochemical units, said regarding the petrochemical sanctions imposed by the United States; that in the past two years, despite the sanctions that occurred in the petrochemical industry, our effort was to develop export markets.

He said: "By developing export markets through direct sales, the number of our markets increased to 16 countries in 1401, to 23 in 1402, and to 32 countries by the end of the first eight months of 1403."

Although Iran is one of the countries that produces petrochemical products and some of these products are used domestically, the problem here is that part of the country's foreign exchange budget can be controlled through the export of various petrochemical products and the import of foreign exchange from the export of these products.

For this reason, the import of foreign exchange for petrochemicals is always monitored by the Central Bank.

Growth of Iranian petrochemical exports this year

In this regard, the CEO of the National Petrochemical Company recently said that the total export of the petrochemical industry in the first 11 months of this year was about $12 billion, of which $9.14 billion was exported.

He added: "Our estimate is that the country's petrochemical industry will earn about $800 million to $1 billion in foreign exchange in March, and the total export of the petrochemical industry this year will reach $13 billion."

Abbaszadeh noted: "The discrepancies in the announced figures regarding the value of exports and the amount of foreign exchange injected are mostly due to the differences between the Central Bank's figures and the self-declarations of the petrochemical companies, and one of the reasons for the differences is probably related to petrochemical products that are exported by various companies that are not under the supervision of the National Petrochemical Company."

He continued: In this regard, access to the commercial foreign exchange market trading system of the Iranian Foreign Exchange and Gold Exchange Center is necessary and essential for the National Petrochemical Company so that timely monitoring of the performance of petrochemical companies can be established and provided as soon as possible.

The Deputy Minister of Oil clarified: For this purpose, correspondence and necessary follow-ups have been carried out with the relevant departments of the Ministry of Finance and the Central Bank, and it is expected that access to the National Petrochemical Company will be established as soon as possible with the cooperation of the Central Bank.

Hassan Abbaszadeh, CEO of the National Petrochemical Company, stated: Since 2018, monitoring of foreign exchange earned from petrochemical industry exports has been based on a program that is prepared at the beginning of each year in coordination with the companies based on the production forecasting program for each complex, sales and meeting domestic needs, exports, and a census of each company's foreign exchange needs, including the supply of chemicals, catalysts, spare parts, and the implementation of projects at the National Petrochemical Company, and is sent to the Central Bank of the Islamic Republic of Iran.

He added: "Except for the amounts used to supply chemicals, catalysts, spare parts, and implement projects by registering orders and controlling the National Petrochemical Industries Company, the foreign exchange earned from exports has been made available to the banking system directly through the NIMA system and since February 1st in the Gold and Foreign Exchange Exchange Center, based on the mechanisms and arrangements issued by the Central Bank in the form of various circulars, and the Central Bank has been using them based on its priorities and foreign exchange policies."

The Deputy Minister of Oil stated that "in this regard, companies active in the petrochemical industry have returned the foreign exchange earned from exports to the country's economic cycle under the direct supervision of the National Petrochemical Industries Company in accordance with the latest instructions and circulars of the Central Bank," and said: "The performance of exports and the injection of foreign exchange earned from them into the country's economic cycle in the first 11 months of 1403 and 1404 was approximately equal to 9 billion and 140 million dollars, which does not show any change."

He added: Of course, there are minor changes in the amount of exports in different months from the beginning of Farvardin to the end of Bahman 1403 compared to the same months of last year, which is inevitable given the problems and obstacles to exports, including unilateral and cruel sanctions; the important point is that the eleven-month performance of the entire petrochemical industry in terms of exports is unchanged from last year.

Trump cannot disrupt the export of Iranian petrochemical products

Seyed Hamid Hosseini, a member of the Joint Chamber of Commerce of Iran, also stated: Trump's return to the American arena of power is not a concern for us, the only concern may be that his behavior is unpredictable and outside of diplomacy; not only Iran, but none of the countries in the world welcome the election of Trump as US president.

The spokesman for the Oil, Gas and Petrochemical Products Exporters Union added: Commenting on Trump's impact on the Iranian economy is subject to the clarification of some aspects of this issue. In simpler terms, the clarification of his approach towards Iran, as well as the composition of Trump’s team of policymakers and advisors, are among the things that will increase or decrease the impact of this issue on the Iranian economy.

Regarding the possibility of economic interactions between Tehran and Baghdad being affected by Trump’s presence in the White House, this member of the Iran-Iraq Joint Chamber of Commerce explained: This issue will not affect the economic relations between Iran and Iraq. Currently, numerous contracts or memorandums of understanding have been signed between the two sides in various economic fields. In addition, Iran and Iraq are in dire need of each other in some areas, such as electricity and gas exports.

In response to the question of whether Trump’s presence in the White House could affect the export of petrochemical products and the foreign exchange resources derived from their exports, Hosseini said: No; products in this area will not be negatively affected. Iran’s export of petrochemical products to other countries was not accompanied by serious problems even during Trump’s first term as president.

It is important to note that although the sanctions on the export of petrochemical products have not been effective, it seems that the import of parts and equipment required by the petrochemical industry has encountered problems. Therefore, some petrochemical complexes have taken steps to manufacture these parts domestically in order to get rid of this problem.

In this regard, Heydarzadeh, CEO of one of the country's polymer-producing petrochemical complexes, said that after the sanctions were imposed, a self-sufficiency committee and innovation center were formed. This committee, in cooperation with various knowledge-based companies and centers and universities, including various departments of the Ministry of Defense, was able to design the initial plan and technical package and manufacture more than 6,000 parts, which resulted in economic savings of 1,676 billion rials.

Also, former officials of the National Petrochemical Company had previously announced that specialized committees for domestic production had been formed in petrochemical units, and with this move, self-sufficiency could be achieved in the production of a significant portion of the equipment needed by the petrochemical industry by 1405.