Iranian officials report 35% drop in trade due to US sanctions

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Iranian President Masoud Pezeshkian reported a 35% decline in foreign trade due to U.S. sanctions and a naval blockade, while annual inflation in Iran reached 66%. The U.S. Treasury Department intensified its financial pressure by sanctioning Egypt's Banque Misr, restricting its UAE branches from dollar transactions, and targeting entities in Hong Kong and individuals linked to Bank Melli. Despite these economic measures, Iranian naval officials challenged U.S. claims regarding the status of the Strait of Hormuz, asserting that the waterway remains closed to ships without Iranian permission. Meanwhile, Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani engaged in discussions with Iranian leadership aimed at reviving diplomatic efforts and restoring open shipping through the Strait.

Consequences

The continued restrictions on shipping are likely to maintain downward pressure on trade volumes, as indicated by the drop to seven commodity vessels transiting the Strait of Hormuz on Thursday. Financial institutions operating in the region may face increased operational risks as the U.S. continues to impose secondary sanctions on entities maintaining business ties with Tehran.

Sources

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