Iran’s Attempts to Get Around the Hormuz Blockade Are Hitting a Wall - WSJ

Good read, a few highlights:

“Iran vowed to respond to a U.S. blockade by pushing more trade overland. On the ground, it isn’t going according to plan.

Hundreds of Iranian truck drivers are currently stuck at Iran’s border with Pakistan, unable to send their goods into Tehran’s neighbor. They say they are facing worsening bureaucratic hurdles and costs, many caused by their own government. The same thing is happening at Iran’s land borders with Turkey, Turkmenistan and Afghanistan, dealing Tehran a self-inflicted blow and throttling trade through its few remaining economic release valves.

Tons of stranded apricots have been spoiled because of the delays. Lucrative cargoes of iron ore, cement and bottled gas are stuck at entry points to the Pakistani and Afghan borders, truckers say.

Iran’s attempts are faltering. The U.S. is isolating its economy with new sanctions and launching strikes on Iranian tankers in reprisal for Tehran’s attacks on its Navy, collapsing seaborne exports.

In another setback for Iran’s plans to bypass Hormuz, the country’s Mahan Air, which is sanctioned by the U.S., said Wednesday that it was suspending flights to Oman and Turkey, state-affiliated media in Tehran said. Last week, the U.S. Treasury imposed new sanctions on companies it said were supporting Mahan, which operates cargo and passenger services.”

The U.S. blockade has also hurt Iran’s imports of basic goods, 70% of which normally go through the blockaded ports. Though humanitarian goods and food are ostensibly exempt, the reality is that shippers are reluctant to service Iran.

Videos posted on social media last week show cranes at the Port of Shahid Rajaee, Iran’s largest commercial container port, at a standstill. Thousands of containers are stranded in ports in Pakistan, the United Arab Emirates and Saudi Arabia, transportation professionals in Tehran last month told the Mehr News Agency, which is affiliated with Iranian security services.”

“The rising costs are now adding to Iran’s worsening inflation problem.

In some cases, the overland bottlenecks and diversions now contribute as much as a third of the price for common goods once they reach Tehran, Mohammad Reza Khodarahm, an import-sector expert, told Iranian economic daily Donya-e-Eqtesad last week. Majidreza Hariri, the president of the Iran-China Chamber of Commerce, earlier predicted that the U.S. naval blockade would cost $18 billion a year in extra outlays. The cost of transporting one container from China to Iran costs $12,000 via land routes compared with $3,000 by sea, he told KhabarOnline, an independent website close to regime moderates.

Much of these costs are being passed on to consumers, with unpredictable results for the Iranian leadership. Food inflation rose to 128% in August, according to Iran’s official statistics office.“

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