Date: 10 January 2016 10:12
Baku, Azerbaijan, Jan. 7
By Farhad Daneshvar – Trend:
Tehran and Riyadh took the direction towards cutting the commercial ties. However, it appears that the economic competition is going to have no winner as trade volumes between Iran and Saudi Arabia are paltry with a turnover of $146 million between March and September 2015.
Responding to a recent decision by Riyadh to halt commercial ties with Iran, Tehran banned the import of products from Saudi Arabia Jan. 7.
Over the past week, the relations between Iran and Saudi Arabia have severely deteriorated following the kingdom’s execution of a prominent Shia cleric, Nimr al-Nimr, on Jan. 2.
Saudi Arabia and its allies including Sudan, Djibouti, Bahrain and the UAE joined diplomatic action against Iran following the break into the embassy in Tehran, breaking off or downgrading relations with Iran over the past week.
source: World Bank
Iran exported $113.1 million worth of goods to Saudi Arabia during the first seven month of the current Iranian fiscal year (started March 21, 2015), meanwhile imports accounted for $33.1 million.
According to the Iranian customs service the Islamic Republic imported aluminum cans for beverages and their pull tabs as well as polyethylene from Saudi Arabia, last year. This is while Saudi Arabia imported products of sponge iron, iron bullions and non-alloy steel as well as saffron from Iran.
Trade turnover (March-September 2015)
Iran export to saudi Arabia
Iran import from Saudi Arabia
Source: Iran Customs Administration
Tehran’s only non-oil exports was estimated about $24.131 billion between March and September last year, which proves that the size of Iran’s trade turnover with its rival compared to the Islamic Republic’s economy is very small.
While Saudi export’s amounted for $343.3 billion in 2014, Iran’s export of goods and services in 2014-15 was estimated about $93.9 billion with $55.4 billion dollar of oil and gas exports, according to IMF.
Coming to a possible ban by Iran on hajj pilgrimage, which is very unlikely as it is considered as the most important religious ritual among Muslims, the Saudi income from Iranian pilgrims is estimated about $70 million which is not a huge amount compared to Saudi Arabia’s estimated revenue of $8.5 billion from the ritual.
The aforementioned figures only further confirm the opinion that the latest decision to put restrictions over trade ties is unlikely to have a significant impact on the economy of the rival states.
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