Figures released by Iran on June 24 show “non-oil” exports grew by 69 percent in the first three months of the Iranian calendar year, from March 21-June 20, compared with the same period last year.

Iranian customs reported that $10.7 billion of non-oil goods and commodities were exported in this period that was considerably higher than in the same period in 2020 and even before the Covid-19 pandemic in 2019.

Overall exports were said to be over $20 billion, which means that Iran sold around $10 billion crude oil, although customs did not specify it, as part of its starategy to keep infomation about its oil trade secret to the US sanctions. That is a substantial increase if true, but there is no information or breakdown available.

The outgoing Rouhani administration touted the figures as a big success, taking credit after months of unrelenting criticism by hardliners blaming the government for three years of economic downturn. There is no way to independently verify these figures and it must be noted that Iran has repeatedly claimed that it has withstood the pressure of US sanctions, as a way of not appearing weak in current indirect negotiations with the United States.

However, the export figures are not what they seem at the first glance. Observers have pointed out that more than 70 percent of non-oil exports went to just five neighboring countries, with Iraq and China at the top of the list followed by Afghanistan, the United Arab Emirates and Turkey. But what is also important, it appears that a notable part of the growth occurred in exports to Iraq and the commodity that boosted the figure was indeed fuel, not manufactured goods.

The single item that stands out in the quarterly growth was liquefied natural gas shipped to Iraq in the Iranian month of Khordad, May 21-June 20, the leading Iranian economic website Donyaye Eghtesad (World of Economy) noted on Saturday.

The reason Iran pushed for this export was because US sanctions that ban Iranian crude oil exports do not prohibit the purchase of natural gas by other countries, especially by Iraq that enjoys a US waiver to import electricity and natural gas from Iran. The same applies to motor gasoline that is not sanctioned and was the second significant export to Iraq, according to Donyaye Eghtesad.

Exports in the month of Khordad were 112 percent higher than in the same period in 2020. But out of $4.4 billion exports in that month $1.35 billion went to Iraq, with a substantial increase in fuel deliveries. In the two previous months exports to Iraq were around $500 million, again fuel being a substantial component.

Natural gas and gasoline exports occur every month and it is possible that in the latest quarter it began to increase and became substantial in the last 30-day period. Donyaye Eghtesad notes that the sudden increase of exports to Iraq cannot be explained by trucking data on the border crossing points. The website quotes the spokesman of Iran’s customs, Rouhollah Latifi as saying that full details are still not available, but liquified gas was the top export to Iraq.

Another issue related to the increase in Iran’s quarterly exports is the problem of repatriating the proceeds, amid US banking sanctions that would penalize any foreign bank for facilitating money transfers to Iran. For example, Iraq is holding around $6 billion in funds owed to Iran for past imports, while trade with Afghanistan is based on more dealings in cash, broken down into smaller trades.

Iranian officials have also repeatedly pointed out that the nominal value of exports might also be deceiving, as Iran directly or indirectly pays up to 25 percent in additional costs for being able to export goods. Whether it is substantial discounts to attract foreign customers, additional shipping costs to circumvent US sanctions or higher insurance premiums, Iran earns much less cash than the official export figures show.