Page 10 - Iran OUTLOOK 2025

confrontation sparked a series of retaliatory strikes, with Israel targeting Iranian military facilities and dealing significant blows to Tehran's missile production capabilities.
Meanwhile, Iran's nuclear programme continued to raise international concern. French President Emmanuel Macron voiced particular alarm, warning that Iran was approaching a critical threshold in its nuclear development. He pressed European allies to consider reinstating sanctions unless Tehran changed course. While Iranian officials maintained their nuclear activities were peaceful, the country's uranium enrichment reached 60% purity – edging closer to weapons-grade material.
The collapse of Bashar al-Assad's government in Syria dealt a serious blow to Iran's regional strategy. Assad's fall disrupted Tehran's "Axis of Resistance" and hampered its ability to support allied militant groups, including Hezbollah. As Iranian-backed forces suffered setbacks against Israel, the regime tightened its grip at home, notably increasing executions to quell growing dissent.
Yet Iran continued to pursue diplomatic openings. A July agreement with Turkmenistan paved the way for a new gas pipeline, whilst diplomatic ties with Sudan resumed after an eight-year hiatus with the exchange of ambassadors. However, relations with Italy soured over the arrest of an Iranian engineer, whom American authorities accused of providing drone technology used against US forces.
The summer election of President Masoud Pezeshkian suggested possible changes in Iran's foreign policy direction. Though Pezeshkian expressed willingness to resolve the nuclear dispute with Western powers and called for dialogue to ease regional tensions, Iran's domestic economic troubles – made worse by widespread corruption and poor governance – continued to limit its international influence.
• 3.1 Trade dynamics
Iran's foreign trade painted a complex picture in 2024, with total trade volumes reaching nearly $100bn. Exports claimed the lion's share at $60.2bn, whilst imports stood at $39.5bn. Most striking was the 15% surge in non-oil exports, which touched $32.5bn – evidence of Tehran's growing success in weaning its economy off oil dependency.
The country's trade with its neighbours proved particularly robust. Up to the end of November, regional commerce had hit $55.3bn, split between 67mn tonnes of outbound goods worth $25.8bn and 21.4mn
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