All around the world, the West is putting the squeeze on Iran's oil industry - constricting the flow of payments and complicating trade relations.
The United States has recently extended its sanctions to target any company trading in Iranian oil, and, in the next tightening of the screw, the EU is expected to cease trading in Iranian crude by July.
Evidence is mounting that the measures are already having an impact on crude flows.
Banks are cutting ties with the Iranian central bank and its commercial lenders to avoid punitive measures from the US - leaving companies as far afield as South Africa and the Philippines smarting as revenues dwindle and trade suffers.
Last month, the financial world was rattled by the admission by Noor Islamic Bank that it had maintained commercial relationships with Iran's two biggest lenders as late as December, until pressure was applied by the US Treasury department.
The effect of sanctions on Iran was one of the major risks for the economies of Gulf states following the Arab Spring, especially if sanctions are escalated, said Henry Azzam, the regional chairman of Deutsche Bank.
"Tighter enforcement of sanctions against Iran would definitely impact countries that have strong trade relations with Iran … mainly the UAE, where trade with Iran accounts for 8 per cent of gross domestic product," he said. "If trade goes down, this would be transmitted to the banking sector."
Iran, the second-biggest economy in the Middle East, was the UAE's fifth-most important trading partner in 2010 after India, the EU, Japan and China, according to the latest available trade data from Eurostat.
European countries have already started to wind down oil trading with Iran in anticipation of an embargo that will come into effect in July, eliminating a market of some 600,000 barrels per day.
Analysts at Barclays Capital estimate that crude exports may have dropped by 300,000 to 400,000 barrels per day.
Last year, Iran's crude exports averaged at 2.2 million to 2.4 million bpd. If BarCap is right, the impending embargo of Iranian oil imports into Europe have already scuppered Iran's hopes of maintaining shipments above 2 million bpd.
China has also reduced its imports, halving contracted volumes in what is regarded as a stand-off over prices.
The Indian government has instructed its refineries to cut the use of Iranian crude, and Reuters estimates that the country could import 20 per cent less oil from Iran.
Japan and South Korea are in negotiations with the US to keep importing from the Islamic republic at reduced levels, without having their financial institutions barred from the US financial system.
Banks operating in the UAE have been affected by US sanctions against Iran in recent years, which have targeted firms including Bank Saderat Iran and Bank Melli Iran and the country's central bank.
Saderat and Melli, the two banks with which Noor traded, are allowed to operate in the UAE because they are not subject to United Nations sanctions, said a Central Bank official who asked not to be named.
Unilateral sanctions such as those implemented by the US and the EU did not have jurisdiction, but international banks operating within the UAE were subject to exposure to sanctions in their home countries, the official said.
"They've risk management functions and they know the risks of dealing with such banks," the official said.
HSBC revealed in its annual report that it was facing investigation by US officials for historical transactions with Iranian parties, which it expected could lead to criminal or civil charges.
In 2010, the Dubai Financial Services Authority said that a number of organisations and individuals inside the emirate's financial free zone, including Persia International Bank, an Iranian lender, were subject to an asset freeze in light of tougher sanctions from the EU.
Saderat and Melli were respectively the third and fourth most profitable foreign banks operating in the UAE in 2010, after Standard Chartered and HSBC, according to the latest available data from the Emirates Banks Association.
Both experienced a growth in total assets during the year, despite the effects of western sanctions.
Saderat's loans grew by 13.2 per cent to Dh6.8 billion (US$1.85bn) in 2010 compared with a year earlier, while Bank Melli increased lending by 15.3 per cent per cent to Dh2.9bn during the same period.
However, the most recent round of US and EU sanctions, which have named the two lenders as targets of sanctions and limit western banks' ability to deal with them, have had a big impact on commercial relations between Iran and the rest of the world.
Indian rice exporters found themselves out of pocket after Iranian companies defaulted on $144 million worth of rice shipments, Reuters reported last month.
Meanwhile, MTN, a South African mobile phone operator, has also reported difficulties in making payments because it is no longer able to use partner banks in Dubai to move money out of Iran.
"It is a challenge because of the sanctions against the central bank and a number of financial institutions," Sifiso Dabengwa, the MTN chief executive, told Reuters.
"Anyone who is actually dealing in euros and US dollars basically can't do business with Iran banks … What we can do is that if someone needs funds internally and has funds outside, we can do those kind of exchanges."
The company, based in Johannesburg, generates about 10 per cent of its revenue from Iran. Philippine farmers have had to consider new markets after sanctions caused difficulties in receiving payments from Iran, the biggest importer of bananas and pineapples in the Middle East.
For the Philippines, the second-biggest exporter of bananas in the world after Ecuador, banana sales to the Middle East total $159m, while the country exports about $32m of pineapples to the region.
Meanwhile, shipbrokers are observing reduced activity in Iranian ports. According to industry insiders, half of all tankers contracted to load crude at the country's largest terminal last month did not make the journey. The decline is driven by owners' inability to obtain insurance.
"We haven't seen a lot of Iran getting lifted recently," said one shipbroker based in London. "The oil is still there, you just can't get the ships there to get it out."
Tankers that are still able to arrange insurance will command a premium, the broker added.
Iran has the largest fleet of crude tankers of any country in the Gulf, and is better equipped than its neighbours to deal without hired tanker capacity.
But the use of tankers to store crude that the country is not able to sell on the world markets indicates that a lack of takers, not transportation, is at the root of Iran's export problems.
This could change if legislation penalising insurers underwriting trade with Iran is implemented, after US lawmakers proposed expanding sanctions to include the insurance sector.
The measure would hit Asian and Russian underwriters, which have stepped into the void left by European insurers.
fneuhof@thenational.ae