5th August 2026
Despite the conflict between the United States and Iran, a number of countries are actually strengthening economic ties with Iran, largely because they see strategic or economic advantages that outweigh the risks of US sanctions.
The main countries include:
China – Iran's largest trading partner and biggest buyer of Iranian oil.
Russia – Increasing trade, military cooperation and investment.
India – Continuing selected trade and infrastructure projects where possible.
Turkey – Maintaining significant cross-border trade.
Several Central Asian countries and some Gulf states are also cautiously rebuilding commercial links.
The reasons vary.
1. Energy Security
Iran has some of the world's largest oil and natural gas reserves. Countries with growing energy demand see Iran as a valuable long-term supplier.
China is the clearest example. It has continued buying large quantities of Iranian crude oil, often through indirect trading arrangements, because discounted Iranian oil helps keep its economy competitive.
2. Cheap Oil
Iran often sells oil below international market prices because sanctions limit its customer base.
For importing countries this means:
lower fuel costs
cheaper electricity generation
lower manufacturing costs
At times the discount has been worth many dollars per barrel.
3. Reducing Dependence on the US
Russia, China and Iran increasingly share an interest in creating trade systems that rely less on the US dollar.
This includes:
using local currencies
expanding alternative banking systems
developing transport routes that avoid Western-controlled shipping lanes.
4. Strategic Influence
Some governments believe isolating Iran entirely would make the Middle East even less stable.
Countries such as Oman and Qatar have often acted as intermediaries because maintaining dialogue with Iran gives them diplomatic influence. Recent reports suggest Oman has again been central to talks aimed at reducing tensions.
5. Geography Cannot Be Changed
Iran occupies one of the world's most important locations.
It borders:
the Persian Gulf
the Caspian Sea
Iraq
Turkey
Pakistan
Afghanistan
and controls one side of the Strait of Hormuz.
Neighbouring countries therefore have strong incentives to keep trade flowing where possible.
6. Transport Corridors
Russia, Iran and India continue developing the International North–South Transport Corridor, linking India to Russia via Iran.
If fully developed, it could reduce shipping times between Asia and Europe significantly and provide an alternative to routes through the Suez Canal.
But many countries remain cautious
Even countries that would like to trade more with Iran often hesitate because they fear:
US financial sanctions
exclusion from the American banking system
restrictions on companies operating internationally
damage to investment relationships with Western markets.
This is why many businesses avoid Iran even when their governments maintain diplomatic relations.
Could this strengthen Iran in the long run?
Possibly.
One of the unintended consequences of sanctions has been to encourage closer cooperation between countries that are less aligned with the United States. China and Russia, in particular, have expanded economic and strategic links with Iran over recent years. However, Iran's economy is still under considerable strain from sanctions, reduced access to global finance and disruption caused by the conflict.
From a wider geopolitical perspective, the world appears to be becoming more economically divided into competing blocs. Rather than completely isolating Iran, the conflict has accelerated efforts by some countries to build alternative trade networks that are less dependent on the United States and Europe. That trend could have long-term implications for global trade, energy markets and international politics.