Rohani turns to Iranian petrochemical exports to beat sanctions

US v IranIranian petrochemical exports are set to jump from $15bn in the Islamic Republic’s current calendar year to $25 bn by the end of the next, Iran’s Minister of Petroleum Bijan Zanganeh said this week, and then added that the annual total could rise to as much as $37bn by 2025. If his predictions are correct, Tehran”s decision to invest heavily in the country’s petrochemical sector as a means of softening the impact of US sanctions on its oil industry will have proved to be an astute one.

Although Iran’s petrochemical industry was substantially affected when US sanctions enforcement was at its most vigorous in 2011-2012, the West’s attitude towards the Iranian petrochemical exports has latterly been more ambiguous. Currently, there are no EU sanctions specifically targeted at the sector, and there are no apparent plans to impose any in the near future.

Iran President RouhaniTehran has responded accordingly. Between Hassan Rouhani’s election as president in 2013 and the end of 2019-20, Iran’s petrochemical production capacity had doubled – and that does not include the nine projects that have come online since then and the eight more that are scheduled to be operational by the end of the current quarter. These include three major complexes that were simultaneously inaugurated last December after a total investment of $1.6bn, most notably the Kaveh Petrochemical Plant, which, with a daily production of 7,000 tons, is one of the largest methanol production complexes in the world. By giving a boost to Iranian petrochemical exports, the new projects could significantly help Iran realise Rohani’s dream of  ‘non-oil revenue, self-sufficiency and employment’.

There are now a total of 55 Iranian petrochemical companies operating in Iran. Between them, they generated $9.5bn in export revenues last year.