Trump threatens to isolate Iran. Who are its trading partners?

• China is Iran's largest trading partner, purchasing an average of 1.38 million barrels per day of Iranian oil in 2025 through a ring-fenced system of refiners with limited U.S. exposure, often disguising Iranian oil as Malaysian or Indonesian
• UAE was among Iran's largest trade partners, providing 30% of its imports worth $21 billion in 2024, but suspended all financial and economic transactions with Iran this week citing military escalation
• Other significant partners include Turkey ($5-6 billion annually), Iraq ($10 billion in 2025, with $4-5 billion for natural gas), and smaller trade relationships with Oman, Pakistan, India, Armenia and Azerbaijan

Market Summary: Trump's Iran Isolation Threats and Trading Partners

Key Development

President Donald Trump has threatened unprecedented isolation measures against Iran, warning of economic consequences for countries maintaining trade relations with Tehran. This follows an escalating military situation, with the UAE already suspending all financial transactions citing Iranian missile threats.

Major Trading Partners and Exposure

China - Iran's largest oil buyer faces significant pressure. Chinese refiners purchased an average of 1.38 million barrels per day of Iranian oil in 2025 (over 80% of Iran's shipped oil). The U.S. Treasury sanctioned a Chinese refinery in April and warned Chinese banks of penalties. China has developed a ring-fenced system using difficult-to-track intermediaries and yuan settlement.

United Arab Emirates - Previously Iran's critical economic lifeline, providing 30% of imports ($21 billion in 2024) and taking 13% of exports. Non-oil trade totaled $6.6 billion in 2024. UAE has now suspended all transactions with Iran.

Turkey - Maintains $5-6 billion in annual bilateral trade, with Turkey exporting approximately $3 billion. Iran supplies 13% of Turkey's natural gas imports. No indication of curtailing commerce.

Iraq - Trade exceeded $10 billion in 2025, though declined in 2026 due to war-related disruptions. Iraq pays Iran $4-5 billion annually for natural gas used in electricity generation.

Other Partners - Oman ($1.5 billion in 2025), Pakistan ($4 billion informal trade), India ($1.63 billion in FY2025/26, down from $17 billion previously), Armenia ($768 million), and Azerbaijan ($312.6 million).

Market Implications

Renewed sanctions could disrupt global oil markets, particularly affecting Chinese independent refiners. Regional energy security faces challenges, especially for Iraq and Turkey's natural gas imports.