Iran: Petrochemical exports grow despite sanctions

Despite Western sanctions, Iran plans to increase its petrochemical exports in 2024-2025, bypassing restrictions through strategic partnerships with Russia and other markets.

Share:

Comprehensive energy news coverage, updated nonstop

Annual subscription

8.25€/month*

*billed annually at 99€/year for the first year then 149,00€/year ​

Unlimited access • Archives included • Professional invoice

OTHER ACCESS OPTIONS

Monthly subscription

Unlimited access • Archives included

5.2€/month*
then 14.90€ per month thereafter

FREE ACCOUNT

3 articles offered per month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 35,000 articles • 150+ analyses per week

Iran continues to consolidate its position in the global petrochemicals market, despite the severe sanctions imposed by the USA and Europe.
For the fiscal year beginning March 2024, Tehran plans to increase its petrochemical production to 83 million metric tons, up from 75 million tons the previous year.
At the same time, exports are set to increase from 30 to 34 million metric tons.
This expansion strategy is underpinned by solid trade relations, notably with Russia, a major outlet for Iranian products.

Sanctions and circumventing financial obstacles

The sanctions imposed by the United States in February 2023 were aimed at stepping up pressure on Iran’s petrochemical sector.
These measures targeted nine companies involved in trading Iranian petrochemicals with Asian buyers.
Despite these obstacles, Iran continues to ship its products to diversified markets, including Africa, South America, Asia and Eastern Europe.
The restrictions, while problematic for financial transfers and banking operations, have not halted Iran’s trade, according to statements by Morteza Shahmirzaee, Deputy Oil Minister in charge of petrochemicals.
Trade with Russia has increased, not least because of the region’s complex geopolitical situation.
With European sanctions against Russia and Iran, both countries have a shared interest in developing alternative energy export routes.
These exchanges are growing in a context where Iran is seeking to maintain its competitiveness against other regional producers, such as Saudi Arabia, whose ethylene production capacity is more than twice that of Iran.

Production and price dynamics on the world market

On the world market, prices for ethylene, one of the petrochemical sector’s key products, rose during 2024.
The benchmark price reached $886.52 per metric ton in early September, its highest level since July 2022.
This price rise can potentially support Iran’s export ambitions, especially as the country plans to produce 7 million metric tons of ethylene in the coming year.
Other products such as methanol and urea, with planned production of 10 and 8 million tonnes respectively, also play a central role in Iran’s export diversification strategy.
The domestic market also remains a priority for Tehran.
Some 13 million tonnes of petrochemical products are destined for domestic consumption, notably in the form of reformates for gasoline octane enhancement and naphtha for olefin units.
Major petrochemical facilities, such as those at Tabriz, Imam Khomeini and Shazand, remain key players in this domestic consumption dynamic.

Investments and future growth prospects

Iran is not content to maintain its current production levels.
Between now and 2029, the country plans to add 35 million tonnes a year of new capacity in the petrochemical sector.
These investments are aimed at strengthening its position in the global market while exploiting new opportunities, particularly in Asia and Eastern Europe.
Iran is thus seeking to reduce its dependence on traditional financial channels by strengthening its bilateral agreements and cooperation with strategic partners, bypassing the difficulties associated with dollar transactions and foreign currency management.
These expansion plans also indicate an intention to capitalize on future price movements in the global petrochemicals market.
By focusing on products such as ammonia and ethylene, Iran could not only consolidate its market share but also attract new customers, particularly in developing countries where demand for petrochemicals continues to grow.

Challenges and adaptation strategies in the face of geopolitical constraints

Iran remains aware of the risks associated with its expansionist ambitions. International sanctions, particularly those imposed by the United States, remain a constant challenge.
However, the emphasis on market diversification, increased production capacity and the establishment of new alliances show that Iran is ready to adapt and innovate.
The aim is to minimize the impact of financial restrictions while optimizing supply chains and export routes.
In conclusion, the Iranian petrochemical sector represents an example of resilience and complex economic strategy in an unstable geopolitical environment.
The next few years will be crucial in measuring the effectiveness of these approaches in the face of increasingly restrictive sanctions and a changing global energy market.

Manila plans to expand gas and renewable energy production to meet a 6.6% increase in electricity demand over the next two years.
Ottawa and London increased bilateral exchanges to structure strategic cooperation on nuclear energy and critical minerals supply chains, as part of Canada’s G7 presidency.
Donald Trump says he secured Narendra Modi’s commitment to end Russian oil imports, adding political pressure to India-Russia trade relations.
Under intense diplomatic pressure from Washington, member states of the International Maritime Organization agreed to postpone by one year the adoption of a carbon pricing mechanism for global maritime transport.
Washington confirms it has mandated the CIA to carry out secret actions against Nicolas Maduro’s government, escalating tensions between the United States and Venezuela amid geostrategic and energy stakes.
Two European Parliament committees propose to advance the full halt of Russian hydrocarbon imports to 2026 and 2027, including oil, gas, and LNG, strengthening the European Union’s geopolitical position.
The COP30 conference hosted in the Amazon by Brazil faces low participation from global leaders, amid geopolitical tensions and major logistical challenges.
The United States has granted Trinidad and Tobago a special licence to resume negotiations with Venezuela on the Dragon gas field, partially lifting restrictions imposed on the Venezuelan energy sector.
Ambassadors of European Union member states have approved the transmission of a legislative proposal to phase out Russian fossil fuel imports by January 2028 to the Council of Ministers.
The State Duma has approved Russia’s formal withdrawal from a treaty signed with the United States on the elimination of military-grade plutonium, ending over two decades of strategic nuclear cooperation.
Polish Prime Minister Donald Tusk said it was not in Poland’s interest to extradite to Germany a Ukrainian citizen suspected of taking part in the explosions that damaged the Nord Stream gas pipelines in 2022.
Al-Harfi and SCLCO signed agreements with Syrian authorities to develop solar and wind capacity, amid an ongoing energy rapprochement between Riyadh and Damascus.
Faced with risks to Middle Eastern supply chains, Thai and Japanese refiners are turning to US crude, backed by tariff incentives and strategies aligned with ongoing bilateral trade discussions.
France intercepted a tanker linked to Russian exports, prompting Emmanuel Macron to call for a coordinated European response to hinder vessels bypassing oil sanctions.
The activation of the snapback mechanism reinstates all UN sanctions on Iran, directly affecting the defence, financial and maritime trade sectors.
Commissioner Dan Jørgensen visits Greenland to expand energy ties with the European Union, amid plans to double EU funding for the 2028–2034 period.
European and Iranian foreign ministers meet in New York to try to prevent the reinstatement of UN sanctions linked to Tehran’s nuclear programme.
Canadian Prime Minister Mark Carney announces a bilateral agreement with Mexico including targeted investments in energy corridors, logistics infrastructure and cross-border security.
The US president has called for an immediate end to Russian oil imports by NATO countries, denouncing a strategic contradiction as sanctions against Moscow are being considered.
Tehran withdrew a resolution denouncing attacks on its nuclear facilities, citing US pressure on IAEA members who feared suspension of Washington’s voluntary contributions.

All the latest energy news, all the time

Annual subscription

8.25€/month*

*billed annually at 99€/year for the first year then 149,00€/year ​

Unlimited access - Archives included - Pro invoice

Monthly subscription

Unlimited access • Archives included

5.2€/month*
then 14.90€ per month thereafter

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.