After the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) or the Nuclear Deal in May 2018, and subsequently implementation of the sanctions on Iran, the trade volume between Turkey and Iran declined sharply. The trade between the two countries reached a record level of about USD 22 billion in 2012 (see Table 1). Although the presidents of both countries declared a political will to increase the bilateral trade volume to USD 30 billion in their meetings and encouraged the business people in the relevant countries and also signed a comprehensive preferential trade agreement in order to improve trade between the two countries, the trade decreased rapidly in the last two years.

Source: TÜİK

Since the secondary sanctions of the US ban the third-country entrepreneurs who continue to trade with Iran from selling goods to the US market, many Turkish businesspeople have hesitated to take the risk. In addition, as the US sanctions make it difficult to do international money transfers, the business people are not able to transfer money to Iran and also have serious difficulties in getting the accrued money if they sell goods to Iran. Because of these two problems, there has been a rapid decrease in the trade of many products other than the directly targeted products such as oil within the scope of sanctions. Turkish traders have reduced their commercial relations even in the trade of the goods not covered by the sanctions due to the difficulties in money transfer. Lastly, because of the COVID-19 outbreak at the beginning of 2020, the customs gates on the Turkey-Iran border were shut for a while, as in many countries. The closure of the customs gates also had a negative effect on the trade relations.

The trade between the two countries decreased to a level of one-third in 2020, compared to the figures in 2017 when sanctions were not in place. While the trade volume was USD 10.7 billion in 2017, it decreased to USD 3.4 billion in 2020.

Source: TÜİK

Table 2 presents the trade statistics between Turkey and Iran in January and February of 2020 and 2021. It can be seen that there is a recovery in both import and export figures in comparison with the figures in 2020. Exports in the first two months of 2021 rose from USD 421 million to USD 509 million, an increase of 17% compared to the export figures in the first two months of 2020. Similarly, the total imports in the first two months rose from USD 249 million to USD 342 million, an increase of 37% compared to the same period of the previous year. The total trade volume in the first month of 2021 went up from USD 670 million to USD 851 million, an increase of 27% compared to the same period of 2020.