Direct Iran-Oman shipping line soon to be launched
The head of the Iran-Oman Joint Chamber of Commerce said some obstacles that hindered opening bank accounts for Iranians in Oman has been resolved and businesspeople are allowed to open accounts for themselves and their companies in the Persian Gulf country, adding that a direct Iran-Oman shipping line will soon be launched.
Jamal Razeqi-Jahromi said that while Iran and Oman have maintained strong political relations over the past 70 years, trade between the two countries has not kept pace with their diplomatic ties.
Although trade volume has grown by 42% to 60% annually over the past three years, the initial trade value is so low that the goal of reaching $5 billion in trade by 2024, as envisioned by the joint chamber, remains unmet.
Razeqi-Jahromi projected that, at best, trade between the two countries could reach $3 billion to $3.5 billion by the end of the year (March 20).
He emphasized that Iran-Oman trade should reach at least $20 billion annually, warning that without achieving this target, the close political ties between the two nations would yield little economic benefit.
During the recent meeting of Iranian and Omani ministers, a joint committee was proposed to address obstacles hindering the growth of bilateral trade.
Razeqi-Jahromi noted that trade tariffs had been a significant barrier, but this issue was resolved during the recent visit, with both sides agreeing to implement a preferential trade agreement that would reduce tariffs to zero.
He also highlighted progress in facilitating cargo transportation between the two countries.
A major challenge has been the lack of a direct and regular shipping line between Iran and Oman. The Omani side has agreed to cooperate, offering to cover 50% of the required subsidy for establishing the shipping line for six months to a year, with the remaining 50% to be covered by Iran’s Trade Promotion Organization.
Razeqi-Jahromi explained that while daily shipping between the two countries is not currently economically viable due to insufficient cargo volume, the subsidy would help offset the costs of operating the line.
He added that for the past two years, Iranian producers have been advised to transfer the final 30% of their production chain to Oman, enabling them to export finished products through Oman and benefit from its zero-tariff trade agreements with 16 countries, including the United States.
Razeqi-Jahromi acknowledged that one of the main challenges for Iranian investors in Oman has been the difficulty of opening bank accounts. While some of these issues have been resolved, others are still under review. Economic figures investing in Oman can now open accounts for themselves and their companies.
“The implementation of the preferential trade agreement, alongside these achievements, could boost Iran’s exports through Oman.”
He also noted that last year, Oman, with a population of 5 million, attracted over 40 billion Omani rials (approximately $140 billion) in foreign investment.
Razeqi-Jahromi concluded that Iran and Oman have the potential for cooperation across all industries, but realizing this potential requires overcoming sanctions and addressing challenges stemming from Iran’s non-membership in the Financial Action Task Force (FATF).