Anna's Deep Dives

_{Just facts, you think for yourself}

6. The Business of Sanctions and Nuclear Development

Economic Impacts of Sanctions on Iran and Global Markets

Economic sanctions against Iran have deeply affected its economy and global markets. Led by the U.S. and its allies, these measures restrict Iran's access to financial systems, trade, and critical resources to curb its nuclear program.

Domestic Economic Strain

Sanctions have triggered hyperinflation, a devalued currency, and declining living standards. Between 2018 and 2025, Iran’s rial lost 95% of its value, with inflation exceeding 40% annually.

The oil and gas sectors faced severe restrictions. Oil exports fell from 2 million barrels per day in 2017 to as low as 100,000 barrels. Government revenues shrank, worsening poverty and economic disparity.

By 2025, over 40% of Iran’s population faced food insecurity, highlighting the sanctions' social impact.

Global Market Dynamics

Sanctions on Iran’s energy sector affect global oil markets. The Strait of Hormuz, through which 20% of global oil flows, remains a geopolitical flashpoint.

Iranian threats to block the Strait have historically driven up oil prices. Escalations in 2024 pushed prices above $120 per barrel, with potential conflicts threatening further spikes.

Adaptation and Economic Shifts

Iran has adapted through illicit networks and partnerships with China and Russia. These alliances help bypass restrictions on oil exports and financial transactions.

China imported 1.2 million barrels of Iranian oil daily in 2023, sustaining Tehran's revenues. Iran’s “dark fleet” of tankers evades detection, facilitating covert trade.

Implications for Global Trade

Sanctions extend beyond energy, disrupting global trade. European and Asian firms, fearing secondary sanctions, have scaled back investments and severed Iranian ties.

This compliance has disrupted supply chains, particularly in industries reliant on Iranian natural gas and petrochemicals.

Iran’s Response: Domestic Innovation and Illicit Procurement Networks

Iran has countered sanctions by fostering domestic innovation and leveraging illicit procurement networks to sustain its nuclear program.

Domestic Innovation

Sanctions have pushed Iran toward self-reliance, leading to advancements in uranium enrichment, centrifuge development, and nuclear infrastructure.

Iran has accelerated research on IR-6 centrifuges, which outperform earlier models. This reduces dependence on foreign technology and demonstrates resilience under sanctions.

Domestic production of nuclear reactor components and military applications has expanded. Engineers use reverse engineering and R&D to replace banned imports.

Advances in medical isotopes and plasma-based technologies illustrate a dual-use approach, blurring civilian and military applications.

Illicit Procurement Networks

Iran has relied on illicit networks to acquire restricted materials. These networks operate through front companies, intermediaries, and third-party nations willing to bypass sanctions.

Smuggled materials include high-strength aluminum, specialized valves, and electronic components for centrifuges. Iran uses "dark fleets" and intermediaries in Malaysia, Turkey, and the UAE to obtain dual-use items.

Iran has strengthened economic and military ties with China and Russia, using these relationships to access advanced technologies indirectly.

Resilience and Risks

While these strategies highlight Iran’s adaptability, they also raise concerns about nuclear proliferation. Iran’s ability to bypass sanctions complicates enforcement and undermines non-proliferation efforts.

Baked with love,

Anna Eisenberg ❤️