Iran’s Shuttered Ports: Trade Collapse, Job Losses, and the Rise of Smuggling

Iran’s coastal economy is buckling under wartime disruption. Port closures across the Gulf have halted trade, triggering mass layoffs in hubs including Bandar Abbas and Bushehr. As exports collapse and alternatives falter, smuggling expands, living standards plunge, and unemployment fuels a growing shadow economy.

• April 27: In a candid article, economic newspaper Donya-ye Eqtesad reported on socioeconomic conditions in Bandar Abbas and other coastal cities in southern Iran:
  • An unnamed “economic actor” in Bandar Abbas said: “Under current wartime conditions, production and trade in the region have effectively faced serious disruption. As a result, we are witnessing a wave of layoffs, particularly in private-sector enterprises. These workforce reductions are estimated at between 30% and more than 60%, depending on the nature of the firms and their resilience under wartime conditions … Following these developments, many migrant workers have been forced to return to their home cities.”
  • Another local source said: “You can see vehicles smuggling diesel moving at high speeds … If you want special contraband cargo, speedboats will supply it for you – though the cost of these boats has risen to about 100 million tomans,” around $700. “Meanwhile, the smuggling of certain goods continues … Most of this smuggling is carried out via Khasab, which is located near the United Arab Emirates, with Iran as the destination … Given the emergence of widespread unemployment in the province, the inclination toward illegal activities and smuggling will naturally increase among those in greater need. Therefore, it must be said that the effects of this unemployment will be long lasting … In some cases, people’s living conditions have become so difficult that ration coupons are their only source of income, and the standard of living has declined sharply.”
  • Khorshid Gazderazi, chairman of the Bushehr Chamber of Commerce, told the newspaper:
    • “The ports of the United Arab Emirates, Qatar, and Kuwait have been closed to Iranian cargo. Among the countries along the Persian Gulf, only Oman continues to maintain trade relations with us, and it lacks the necessary infrastructure to serve as a substitute.”
    • “The port of Bushehr accounted for 70% of the country’s exports to Qatar, but now, in light of the aforementioned problems, our exports to that country have effectively come to a halt. Construction materials and mineral products made up the bulk of Iran’s exports to Qatar through Bushehr. Under current conditions, however, activity in these ports has fallen into recession.”
    • Gazderazi identified the use of Umm Qasr port in Iraq as one of the alternative solutions for transporting goods to the country, adding: “We can also use this port to reduce transportation costs for goods entering the country. However, at present, Iraq does not accept Iran’s transit goods, and enabling this option will require serious negotiations at the level of the government and parliament.”

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