Bilateral relations

Iran was Australia’s 84th largest trading partner in 2020. Total goods and services trade amounted to $214 million in 2020. International sanctions on Iran and the COVID-19 pandemic have weighed heavily on Australia’s bilateral trade and investment relationship with Iran.

Since 2016 Australia has eased some of the trade and financial sanctions on Iran pursuant to the United Nations security council. But there are still some sanctions in place and the Australian government encourages Australian businesses to conduct enhanced due diligence when dealing with Iran and seek legal advice on implications of US sanctions on Iran.

Goods trade with Iran is small. Merchandise exports comprised mostly pharmaceutical products, and medical instruments in 2020. Goods imports are largely made up of fruits and nuts, floor covering, and lime, cement and construction materials.

Services trade is larger than goods trade. The COVID-19 pandemic and associated international travel restrictions have hurt services trade over the past couple of years. Services exports to Iran consist mostly of education and tourism. The ongoing pandemic points to another year of uncertainty for services exports in 2022.

Bilateral investment with Iran remains negligible. International sanctions remain a significant constraint on doing business. If sanctions are lifted, Iran’s vast oil and gas fields could present opportunities for Australian mining firms and food and agriculture has the potential to be an area of collaboration between the two markets.