With a barrel of oil fetching less than half of what it did at its peak last year, Iran's economy has been devastated.

But the knock-on effects of the economic crisis caused by historically low oil prices have reached out across the Gulf to hurt Dubai's Iranian business community.

According to the spokesman for the Iranian Business Council in Dubai, Mohammed Massinaei, turnover amongst Iranian companies here has slumped to just half what it was a year ago.

He added that in the past six months, three of the Council's members have gone out of business largely due to low oil prices.

There are an estimated 2,000 Iranian firms operating in Dubai, mainly in the business of trading and exporting electronic goods, textiles and industrial spare parts.

Last year the value of their exports to Iran was put at $800m but this year's figures will be significantly lower for a number of reasons.

Currency collapse

According to Mr Massinaei, the main contributor is the collapse in the black market value of the Iranian rial against the US dollar.

This makes imports of goods from Dubai prohibitively expensive since their cost to consumers in Iran have risen far in excess of domestic inflation.

Mr Massinaei says the second factor is the reduced currency allocations to Iranian traders by Iran's Central Bank.

With less money flowing into the country from oil exports, letters of credit have recently been delayed.

The editor of the economic news letter, Iran Focus, Bijan Khajehpour, has been quoted as saying that Iran is now at a critical point because it has used up a lot of hard currency reserves.

If there were any optimists left in Dubai and Teheran regarding an oil price recovery, they may have a long wait in store.