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Same Partners, New Routes: Evidence on the Effect of Sanctions on Iran’s Trade Patterns

Mirhashemi, Soroosh | 2025

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 57929 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Ansari, Mahdi; Madanizadeh, Ali; Haidar, Jamal Ibrahim
  7. Abstract:
  8. Trade wars and economic sanctions have become increasingly common tools of economic policy, prompting targeted countries to seek alternative trade routes. For instance, in response to tariffs, China has redirected exports to the United States through intermediary countries. This issue is also relevant in Russia’s confrontation with Western sanctions. In this study, we leverage Iran’s long-term experience with sanctions to examine whether trade re-routing occurs, how quickly it emerges, and whether it persists over time. Analyzing trade data from 2002 to 2023, we find that by the end of this period, 70% of Iran’s imports originated from the UAE, China, and Türkiye, whereas two decades earlier, the top three import sources accounted for only 30% of total imports. We investigate whether this shift reflects a reconfiguration of trade routes rather than a fundamental change in trading partners. To statistically examine the hypothesis, we show that for intermediary countries, their imports from sanctioning countries can predict their subsequent exports to Iran during sanction escalation periods. In 2023, while only 12% of Iran’s imports came directly from sanctioning countries, our estimates suggest an additional 17% arrived through indirect channels. Our findings indicate that trade route adjustments take time to develop and tend to persist beyond the immediate sanction escalation periods
  9. Keywords:
  10. Sanction ; Trade ; Rout Changing ; Financial Intermediation ; Re-Exports ; Trade War ; Imports

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