When an Iranian exporter cannot easily receive payment for goods already sold, when a foreign insurer refuses to cover a shipment, or when an international company declines to sign a contract because of sanctions-related risks, the issue is no longer simply about exports. It is about a country’s ability to maintain economic connectivity with the global economy.
Under such circumstances, economic diplomacy moves beyond being a complementary instrument of foreign policy and becomes part of the infrastructure of foreign trade.
The central question is therefore not whether Iran can export under sanctions. The experience of recent years has demonstrated that it can. The more important question is:
How can Iran transform costly and high-risk trade into a sustainable, diversified and competitive export system?
Sanctions: A Challenge Beyond Selling Goods
Economic sanctions are often associated with restrictions on oil sales, financial transfers or access to international banking networks. Their actual impact, however, is considerably broader.
An international transaction depends on several interconnected components: the buyer, seller, banks, insurers, shipping companies, customs authorities and legal frameworks.
Sanctions can disrupt any one of these links.
As a result, even when an Iranian product is competitive in terms of price and quality, the additional costs and risks associated with a transaction may become so significant that its initial competitive advantage is eroded.
This is where economic diplomacy becomes particularly important.
Economic Diplomacy: From Negotiation Rooms to Export Markets
Economic diplomacy should not be reduced to official visits, diplomatic meetings or the signing of trade memoranda.
In practical terms, effective economic diplomacy should help Iranian businesses create access to markets, trade routes, partners and viable transaction mechanisms.
Commercial attachés, embassies, chambers of commerce and diplomatic institutions can play a meaningful role when the results of their activities become visible in the real economy.
Identifying a potential customer is important. But creating the conditions that allow an agreement to become an actual transaction is far more consequential.
Economic diplomacy therefore needs to move from relationship-building to commercial problem-solving.
New Markets: The Need to Reduce Export Concentration
Iran’s trade structure under sanctions has increasingly shifted toward neighboring countries and Asian economies. China, Iraq, the United Arab Emirates and Türkiye are among the important destinations for Iranian exports.
These markets are strategically significant for Iran. However, excessive dependence on a limited number of destinations can itself become a source of risk.
The more diversified a country’s export portfolio is, the less vulnerable its overall trade becomes to changes in demand, regulations or political relations in any single market.
One of the central responsibilities of economic diplomacy should therefore be to open new markets—from Central Asia and the Caucasus to Africa, South and Southeast Asia, and other emerging economies.
Market development, however, should not end with trade delegations and participation in international exhibitions.
A market is truly developed when engagement results in contracts, repeat customers and sustainable export flows.
Petrochemicals: A Major Capacity Requiring Specialized Diplomacy
Petrochemicals and chemicals represent one of Iran’s major opportunities for export development.
Methanol, urea, polymers, bitumen and a wide range of chemical products constitute an important part of Iran’s export portfolio.
Yet competition in global petrochemical markets is not based on price alone. Consistent supply, supplier credibility, payment terms, logistics, regulatory compliance and supply-chain security are equally important.
This is an area in which economic diplomacy can play a distinctive role.
The objective should not merely be to sell a single shipment, but to establish long-term commercial and industrial relationships.
Long-term contracts, joint investments, distribution centers in target markets and the development of downstream industries can help transform Iranian exports from occasional transactions into sustainable market presence.
Money: The Hidden Bottleneck of Iranian Trade
One of the most complex challenges facing Iranian exporters is the settlement of international transactions.
When direct access to parts of the international financial system is restricted, exporters are often required to develop different payment arrangements for different transactions.
The use of local currencies, bilateral settlement mechanisms and alternative trade arrangements can help mitigate part of the problem.
However, there is a fundamental difference between an ad hoc solution and an institutional solution.
A sustainable export economy requires a system in which transactions are predictable.
If an exporter has to find a new mechanism for receiving payment for every shipment, the cost and risk of trade inevitably increase.
Economic diplomacy should therefore work alongside political relations to establish stable, reliable and predictable financial mechanisms for international trade.
Geography Is Not Enough; Corridors Are Essential
Iran’s geographical position gives it the potential to serve as a bridge connecting the Persian Gulf with Central Asia, the Caucasus, Türkiye and other regional markets.
But geographical advantage becomes an economic advantage only when supported by efficient transportation networks, port and rail infrastructure, customs agreements and appropriate trade procedures.
The development of regional corridors, including the International North–South Transport Corridor (INSTC), can form part of Iran’s long-term strategy for diversifying export routes.
Economic diplomacy, in other words, should not negotiate only for access to markets; it should also negotiate for the routes through which those markets can be reached.
The Private Sector: A Partner in Economic Diplomacy
No export strategy can succeed without meaningful participation from the private sector.
Export companies are often best positioned to identify the practical obstacles facing international trade. They know what foreign customers demand, what competitors are offering, which transportation routes are economically viable, and which banking or customs barriers can prevent a contract from being completed.
The private sector should therefore not be merely a recipient of economic foreign policy. It should be one of its active components.
Chambers of commerce, export associations and major private companies can provide diplomatic institutions with market intelligence while, in return, benefiting from diplomatic support in addressing concrete trade barriers.
Do Not Measure Success by the Number of Memoranda
A fundamental question concerning economic diplomacy is how its effectiveness should be measured.
The number of meetings, foreign visits or signed memoranda alone cannot provide an adequate measure of success.
More meaningful indicators could include:
• The number of new export markets opened
• The number and value of new export contracts
• The reduction in export-related transaction and logistics costs
• The number of new transportation and trade routes established
• The volume of new foreign investment and joint ventures
• The growth of repeat customers and long-term commercial relationships
Economic diplomacy should ultimately be evaluated by its impact on real economic activity, rather than by the volume of diplomatic activity itself.
The Ultimate Objective: Export Resilience
Developing exports under sanctions requires more than increasing production.
Iran also needs more diversified markets, a broader product portfolio, multiple transportation routes and diversified financial mechanisms.
This can be described as export resilience.
Export resilience means creating a trade structure in which a political, financial, sanctions-related or geopolitical shock cannot bring the country’s entire export system to a standstill.
An economy that depends heavily on a limited number of markets, transportation routes or products may achieve significant export volumes in the short term while remaining structurally vulnerable to external shocks.
Foreign Policy in the Service of Trade; Trade in the Service of Development
Sanctions have highlighted an important reality of the modern global economy:
The boundary between foreign policy and foreign trade has become increasingly thin.
A government decision can influence the behavior of a bank, insurer, shipping company or international buyer. Conversely, the development of stable economic relationships can create a foundation for broader relations between countries.
From this perspective, economic diplomacy should not be treated as a peripheral component of foreign policy. It should become an integral part of the country’s export development strategy.
Iran possesses significant capabilities in energy, petrochemicals, chemicals, mining, agriculture and services. The challenge is not simply to produce these goods and services. It is to connect them to global markets at lower cost, with lower risk and with fewer structural constraints.
Economic diplomacy can help narrow this gap—provided that its results are ultimately visible in real markets.
The objective of economic diplomacy should therefore extend beyond merely maintaining exports during periods of sanctions. Its broader purpose should be to build an economy with more markets, a more diversified customer base, multiple export routes and the capacity to maintain meaningful connections with regional and global economies even in a high-risk international environment.
Iranian exports need economic diplomacy more than ever to navigate the constraints created by sanctions. But this diplomacy should not end at the negotiating table.
Its destination should be the market, the contract and the sustainable expansion of trade.