Iran’s Economy under Sanctions: Two Levels of Impact

Abstract

Iran’s economy has lived under sanctions for the last forty years. Yet their pressure has been uneven: the most sensitive measures were applied against Iran by the U.S. and its partners in 2010–2015 and in 2018–2022. However, despite gloomy expectations of grave consequences for Iran’s economy, it has managed to survive: it has been damaged but not shattered. The Iranian government has succeeded in securing control over the domestic political situation. Even though Tehran has been unsuccessful in completely offsetting the negative impact of the sanctions, it has mitigated their effect in the short term and won time necessary for devising a long-term program of anti-sanctions measures. This article analyzes the impact of sanctions on Iran’s economy with a special focus placed on the factors that determined their partial success/failure. The paper also analyzes the lessons Iran could draw from its experience in resisting U.S. sanctions that may be helpful in counterbalancing the short-and long-term impact of the current U.S. pressure on the country’s economy.