Iran Pivots Toward Asia

Iran is working to strengthen relations with China, India, Japan, and South Korea in a bid to enhance its position on the global stage

As the United States pressures Iran into renegotiating a nuclear deal, Tehran has shifted its focus to strengthening relations with countries in Asia. The Iranian government hopes to make up revenue lost from aggressive Western sanctions through better trade partnerships with nations to its east.

China has consistently been Iran’s top trade partner for over a decade, with trade nearing $16 billion in 2022. In a February summit, Chinese President Xi Jinping underscored his commitment to working with Iranian President Ebrahim Raisi, saying, “Beijing will unswervingly develop friendly cooperation with Iran, regardless of how the international and regional situation changes.”

This support was further demonstrated when six nations, including Iran, were invited on Thursday to join the BRICS coalition, made up of emerging non-Western economic powers China, India, and Russia, as well as Brazil and South Africa.

Iran’s invitation signals that its policy of lowering oil prices to encourage trade with Asian countries is working. In 2018, India stopped importing Iranian oil following the nuclear deal breakdown and the reimposition of US sanctions.

This year, however, India’s relationship with Iran is warming. In a call with Raisi last week, Indian Prime Minister Narendra Modi “highlighted that the India-Iran relationship is underpinned by close historic and civilizational connections,” according to a press release from the Indian Ministry of External Affairs.

Iran’s oil supply has become increasingly lucrative following Russia’s invasion of Ukraine in 2022. Asian countries allied with the US, such as Japan and South Korea, are searching for alternatives to Russia’s oil supply.

Iran is considering Japan as a gateway to further negotiate with the US.

In August, Iranian Foreign Minister Hossein Amir-Abdollahian met with his Japanese counterpart, Yoshimasa Hayashi, to discuss cooperation. This was part of what Abdollahian called an “Asia-centered” foreign policy following his appointment in 2021.

“Iran and Japan have maintained a good relationship even during US sanctions. I think Iran is considering Japan as a gateway to further negotiate with the US,” University of Tokyo Professor Kazuto Suzuki told The Media Line.

Suzuki said Iran sees economic opportunity in Japan, which holds Iranian funds frozen due to sanctions. In an August deal with the US, Iran gained access to $6 billion in frozen funds from South Korea, which are meant to be used for humanitarian aid. In exchange, the US received five imprisoned Americans.

“South Korea is a free agent and has historically just tried to lie low and not necessarily get caught in any kind of sanctions application,” said Scott Snyder, a senior fellow with the Council on Foreign Relations.

Snyder estimates that Iran accounted for 10% of South Korea’s oil supply before the US imposed sanctions and asked South Korea to freeze Iranian funds.

“The cooperation with the US came with a cost to South Korean businesses,” Snyder told The Media Line. “South Korea may try to revive some of its trade with Iran, but they’re very cognizant of the international environment.”

The unfreezing of funds by South Korea has encouraged Iran to hope Japan could follow suit.

“There is a substantial amount of [Iranian] funds frozen in Japan,” Suzuki told The Media Line. “I think this is part of the negotiation to further the deal between the US and Iran. … I believe this is one of the steps toward unfreezing the funds in Japan.”

The experts say Japan and South Korea are acting like middlemen in the broader negotiations between the US and Iran. Iran hopes that strengthening its relationship with these countries will boost the likelihood of more funds being unfrozen.

The US pursues active diplomatic campaigns to ensure compliance with allies.

“I would distinguish Iran from the rest of the Middle East because that is where I think the US has weighed in and made specific requests,” Snyder said. “The US pursues active diplomatic campaigns to ensure compliance with allies.”

Iran hopes a warming of relations with countries in Asia will strengthen its position on the global stage and give it more leverage if it decides to renegotiate a nuclear deal with the US.

“I think it’s a signal that Iran is back to the international community,” said Avner Golov of MIND, an Israeli national security consultancy. “It helps Iran cope with the challenges they need to cope with.”

Meanwhile, the US has downplayed BRICS’s expansion. Last week, White House national security adviser Jake Sullivan said the US does not see the BRICS coalition as a geopolitical rival.

Patrick Doyle is a recent graduate of San Diego State University and an intern in The Media Line’s Press and Policy Student Program.