Trade Official Says Bartering Oil Amid Sanctions Is A Loss For Iran

In an interview with Iran’s labor news agency on Sunday, the deputy head of the Iranian Pharmaceutical Importers Association, Mojtaba Bourbour, said about 80 to 90 percent of the needed raw materials are imported from China and India. He added that some medicines are imported from China but sold as made in Iran.

Noting that there is no precise data on the amount of the imports of drugs packaged abroad, Bourbour said that unofficial figures indicate a $400 million dollar decrease to about $700 million since last year.

He added that most of Iran’s imports of packaged medicines are from the United States and European countries, followed by India and Turkey.

He also criticized the government’s policies that led to the decrease in imports, warning that medication prices may rise dramatically in the coming months as a result ofrestrictions by the health ministry and not foreign sanctions.

Also on Sunday, Iran’s Health Minister Bahram Eynollahi talked of further restrictions on imports of medicine and pharmaceutical products, while the Food and Drug Administration announced a ban on the imports of COVID-19 vaccines.

Eynollahi urged people to trust drugs made in Iran and warned Iranian doctors against prescribing foreign brands of medicine.

The comments, if published on any website in Iran, are strictly moderated to avoid possible insult against state officials, yet they reveal how the Iranian society perceives developments reported by the media.

Commenting on how likely is a nuclear agreement between Iran and the West, one reader said on Alef website, "Clearly Iran should fulfil its commitments under the JCPOA. An agreement would be possible if Iran does so, otherwise, there will be no agreement." As the comment looks contrary to Tehran's official view, the website replied: "Let the West do it first for once."

Another reader commented: "The United States wishes to return to the JCPOA so that it could activate the trigger mechanism and return all the UN resolutions against Iran. What the Iranian people want is a sustainable long-term agreement with the West."

Yet another user said: "We, and not the West, urgently need to negotiate and to reach an agreement. It is our economy that suffers from an 85-percent inflation [in some cases], not their economy. Prices change by the hour here, not in the West. Almost everyone has come to the conclusion that what we needed in Iran is an end to sanctions rather than a change of government."

The website replied that due to the mismanagement of the economy during the past 50 years, the rise in inflation will continue even if the sanctions are lifted.

Recently, when Iranian officials admit serious problems like inflation and drought, they refer to 50 years, to include the last few years of monarchy in Iran when the economy was in fact booming.

Another reader said, "They call themselves economists and still want to raise the income tax by 64 percent. Even the current tax rate is too much for some businesses." A third user opined that "the wave of immigration from Iran is caused by high prices and inflation."

One reader summed up a sentiment often evident in social media posts by Iranians. "If you cannot solve the problem of Iran's economy, what is wrong with asking the views of some international economists? Stop coming up with temporary solutions that redouble poverty and hunger in this country and increase inflation. The people can no longer tolerate price rises."

Referring to selling government assets as a way of coping with the country's massive budget deficit, one user commented: "Please do not sell government assets to plunderers. Instead of selling government assets to corrupt individuals, take back their illegitimate wealth and punish them for disrupting the national economy."

"It is a fact that the government is confused about many things particularly about the economy. Economic figures in the government do not work in coordination with each other and it is every man for himself. However, none of them has a solution," one of the comments said.

An article on the website that said the reason why lawmakers want to impeach Minister of Industry Reza Fatemi Amin is that he has not been able to control car prices also attracted attention. One reader said that "car prices can be controlled if the government allows the import of foreign-made cars to end the monopoly of Iranian automobile makers in the market. The competition will also lead to an improvement in the quality of domestically manufactured vehicles."

Another user said that "someone should first impeach the lawmakers who wish to impeach the Minister. Their performance is no better than the members of the cabinet."

Mohammad-Hossein Malaek, former ambassador to China and Switzerland, told the Iranian Labour News Agency (ILNA) that Bejing anticipated a leading role in developing the Makran region, the coastal strip along Iran’s Sistan-Baluchestan province and Pakistan’s Balochistan, where Beijing already has a 40-year multi-billion-dollar agreement with Islamabad to develop Gwadar port.

Malaek added that China's decision to open its consulate in Bandar Abbas is a calculated move as the it will be able to offer support to the many companies that the Chinese expect to establish in Makran as well as those already active in Chabahar Free Trade and Industrial Zone and Bandar Abbas, Iran's most important southern sea transportation hub.

The Iranian cabinet approved the opening of the consulate, China’s first in Iran, December 29. Malaek pointed out that Iran had three consulates in China, which under the Vienna Convention entitled China to same number in Iran.

Majid-Reza Hariri, Chairman of Iran-China Trade Chamber, told ILNA that several agreements were signed during Chinese President Xi Jinping's visit to Tehran in 2016 to establish industrial towns in both the port of Jask, Hormozgan, and in Sistan-Baluchestan.

Hariri said cooperation would expand given 25-year strategic pact between the two countries, and that Chinese investment in south and south-eastern Iran − including oil, gas, petrochemicals, and infrastructure could also expand. Hariri said many Chinese citizens based in Iran lived in the region.

India already has a project for developing the port at Chabahar, which is only 170km west of Gwadar. Both ports aim at opening a trade corridor with Afghanistan and Central Asia.

Looking east

President Ebrahim Raisi has said he wants to expand relations with Iran’s neighbors and with both China and Russia, and that he plans on a visit to Moscow with the next few weeks to sign a strategic pact similar to the one signed with China in March 2021.

While some Iranians view with suspicion both the pact with Beijing and the proposed pact with Moscow, Beijing is already Tehran's top trading partner at around $19 billion and trade with Russia is around $2 billion despite US ‘maximum pressure’ sanctions introduced in 2018. China’s Belt and Road Initiative, covering 142 countries and including port development and sea routes as well as land links, has been estimated to give a $7-trillion annual boost to world GDP by 2040 and boost China’s political and economic influence, especially when it comes to isolated countries like Iran or Venezuela.

China and Russia both reduced economic connections with Iran after the US began ‘maximum pressure,’ which threatened punitive action against any third party buying Iranian oil or dealing with its financial sector.

But whereas Iran’s European oil customers and US-allied Asian customers stopped buying Iranian crude, Chinese companies have been buying 600-700,000 barrels a day through unofficial channels.

According to reports, the fire broke out Friday night in one of the transmission pipelines of phase 16 of the gas field, shutting down the platform.

Pars Oil and Gas Company said in a statement on Saturday that the production unit went out of operation although there was no fire on the platform itself and the accident had no human casualties.

It added that planning for repair work began as soon as the fire in the nearby pipeline was contained. Repairing such a pipeline may take several weeks.

The statement said lightning was the cause of the fire, noting that it ignited gas, which was leaking from the underwater pipeline. "The gas emitted to the water level was ignited by lightning 15 kilometers from the platform," the operating company stated.

An expert speaking to Iran International commented that the leak must have been a significant one to have caused a fire and the pipeline should be considered out of actions for a long time. Apparently, Iran used domestically produced pipes for laying the line in 2015, which would not meet industry standards, he said.

A source has told the semiofficial Mehr news agency that the 100-kilometer pipeline had many technical problems, and 70 kilometers of it had been replaced, but the remaining 30-kilometer segment was under repair. He added that the accident happened after 15 million cubic meters of methane-rich gas was injected into the pipeline.

After a video footage began circulating on social media, the state broadcaster moved to react and said the damage was not large.

The frequency of accidents in Iran’s energy facilities is increasing with some blaming lack of proper maintenance of the aging infrastructures and some suspecting sabotage by other countries, presumably Israel.

Production at the South Pars gas field has been dropping gradually in recent years as Iran is unable to make the necessary investments and improve its technology due to various sanctions. Last year, the field produced 70 percent of Iran’s daily 690 million cubic meters of natural gas output.

Meanwhile, with the world’s second largest gas reserves, Iran is unable to keep up with growing domestic demands, leading to frequent power cuts, although dirty fuels are substituted at power stations.

The incident must have reduced at least 15 million cubic meters of daily production, which can put further pressure on domestic gas supplies amid cold winter months.

Last winter, Iran experienced large power cuts in major cities. Protests broke out on a few occasions. When authorities started burning mazut, a dirty unrefined fuel to generate electricity, it led to heavy pollution in cities adding to the popular anger.

Head of the crisis management taskforce of Hormozgan province said on Saturday that an eight-year-old girl was drowned by floodwater in Bandar Abbas. He added that about 30 villages lost power and a lot of roads are blocked, making rescue operations even harder and slower. Floods have also caused damage to agricultural lands, houses and infrastructure.

In the eastern province of Sistan-Baluchestan, the flood has caused enormous material damage, leading to the closure of schools, shops and offices. The province was already suffering from lack of clean water amid a drought.

The director of the Bushehr meteorological office said on Saturday that heavy rain has caused seasonal rivers to overflow their banks which led to flooding of thoroughfares in several cities. He also spoke about serious damage to the farmlands and orchards.

Mehdi Valipour, the head of Iran’s Red Crescent Society, said on Friday that rescue operations were underway in about a dozen flood-stricken provinces.

Iran’s Meteorological Organization has predicted more rains, blizzards, thunderstorms, and hails for almost all the country in the next five days.