Iran Faces Major Economic Blow from Hormuz Closure

Iran's closure of the Strait of Hormuz appears to have dealt far greater damage to its own trade with China than to Beijing's commerce with the rest of the Persian Gulf, according to newly released Chinese customs data.

Between March and June 2026, Iran's non-oil trade with China totaled just $830 million, a decline of roughly 75% from $3.3 billion during the same period last year. Kpler shipping data reviewed by Iran International also point to a sharp decline in Iranian oil exports to China.

Average daily unloadings at Chinese ports fell from 1.74 million barrels per day in April to around 550,000 barrels per day in the first half of July. These figures suggest the Strait of Hormuz closure has dealt a severe blow to Iran's economic ties with its largest trading partner. China remains the only major buyer of sanctioned Iranian crude and was by far Iran's most important commercial partner in 2025.

Although trade between China and other Persian Gulf states also declined after the Strait closure, the contraction was far less severe than in Iran's case. Chinese customs data show Bahrain, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates recorded a combined $109 billion in bilateral trade with China during the first half of 2026, a 29% decline from a year earlier. By contrast, total trade between Iran and China during the same six-month period fell 59%.

The impact extends well beyond China. Last year, Iran’s Arab neighbors accounted for roughly 51% of Iran's total non-oil trade. Since March, trade between Iran and all of those countries except Iraq has effectively come to a halt. According to Eurostat, trade between Iran and the European Union fell by more than half during the first three months of the conflict, dropping below €430 million.