Iran's Sanctions Saga: Are They Working Or Just Hurting?

Jayme Macejkovic 18 Jun 2025

Are sanctions hurting Iran? This question lies at the heart of a decades-long geopolitical struggle, impacting not only the Iranian government but its 80 million citizens. For years, international powers, primarily the United States and the European Union, have leveraged economic and financial restrictions against Tehran, largely in response to its nuclear program and regional activities. The stated goal is often to compel a change in behavior, to bring Iran to the negotiating table, or to curb its strategic ambitions. However, the real-world outcomes of these measures are far more complex and often fraught with unintended consequences, raising critical questions about their effectiveness and the profound human cost.

Understanding the impact of these sanctions requires a deep dive into Iran's economic landscape, its social fabric, and the broader geopolitical chessboard. While Iran's leaders have consistently stayed defiant in the face of the sanctions, their substantial impact is undeniably clear. This article will explore the multifaceted effects of sanctions on Iran, examining their economic strangulation, the humanitarian crisis they have exacerbated, their effectiveness as a foreign policy tool, and the intricate paths forward.

The Enduring Weight of Sanctions: A Historical Perspective
The Economic Squeeze: How Sanctions Impact Iran
- Energy Exports and Foreign Reserves
- Crumbling Economy and Daily Life
The Humanitarian Toll: A Crisis Unfolding
- Poverty and Essential Goods
- The Broader Impact on Infrastructure
Sanctions as a Tool: Effectiveness and Unintended Consequences
- Government Defiance and Paranoia
- A Global Trend: The Rise of Sanctions
The Nuclear Deal and Its Aftermath: Trump's "Maximum Pressure"
Biden's Dilemma: Continuing Economic Pain
Beyond Economics: Geopolitical Repercussions
The Path Forward: Lifting Sanctions and Re-engagement
Conclusion: The Human Cost and Policy Crossroads

The Enduring Weight of Sanctions: A Historical Perspective

The notion of "sanctions hurting Iran" is not a recent phenomenon; it's a narrative that stretches back decades. Iran’s economy has lived under sanctions for the last forty years, a testament to the persistent geopolitical tensions between Tehran and Western powers, particularly the United States. While the pressure has been uneven over this long period, it is clear that the most sensitive measures have consistently been applied against Iran by the U.S. These measures have evolved in scope and intensity, targeting various sectors of the Iranian economy, from its energy industry to its financial institutions, and even its shipping lines.

The rationale behind these long-standing restrictions has often been tied to Iran's nuclear ambitions, its ballistic missile program, and its support for regional proxy groups. Each new development or perceived transgression has typically been met with another layer of economic pressure. This protracted period of isolation has forced Iran to develop a "resistance economy," attempting to minimize its vulnerability to external pressures by fostering domestic production and seeking alternative trade partners. However, despite these efforts, the cumulative effect of four decades of sanctions has profoundly shaped Iran's economic trajectory and its people's daily lives.

The Economic Squeeze: How Sanctions Impact Iran

The core mechanism through which sanctions are intended to exert pressure is economic strangulation. The question of "are sanctions hurting Iran" is unequivocally answered in the affirmative when examining the country's economic indicators. The economic and financial sanctions imposed by the United States and the European Union, primarily in response to Iran’s nuclear program, have been particularly effective in restricting Iran’s energy exports and have led to a rapid depletion of its foreign exchange reserves. This direct assault on Iran's primary source of revenue has had cascading effects throughout its economy.

Still reeling from previous trade restrictions, notably those imposed by President Donald Trump in the wake of his decision in May 2018 to abandon the 2015 nuclear deal (Joint Comprehensive Plan of Action - JCPOA), Iran's economy was hit by yet another wave of severe penalties. This "maximum pressure" campaign sought to bring Iran's oil exports to zero, drastically cutting off its access to international markets and vital hard currency. The result has been a significant downturn, with Iran's economy crumbling after years of U.S. sanctions.

Energy Exports and Foreign Reserves

Iran possesses the world's fourth-largest proven crude oil reserves and the second-largest natural gas reserves, making energy exports the lifeblood of its economy. Sanctions targeting this sector aim to cut off the government's primary source of revenue, thereby limiting its ability to fund its nuclear program, military, and other strategic initiatives. The restrictions on Iran's energy exports have been highly effective, severely curtailing its ability to sell oil and gas on the international market. This has directly led to a rapid depletion of its foreign exchange reserves, which are crucial for importing essential goods, raw materials, and machinery.

When a country's foreign exchange reserves dwindle, its currency weakens, making imported goods more expensive and fueling inflation. This creates a vicious cycle where the government struggles to finance basic services, and businesses find it increasingly difficult to operate due to the high cost of imports and the inability to conduct international transactions. The impact on the national budget and the overall economic stability is profound, directly answering the question of "are sanctions hurting Iran" with a resounding yes in the economic realm.

Crumbling Economy and Daily Life

Beyond the macro-economic indicators, the effects of sanctions permeate every aspect of daily life for ordinary Iranians. The crumbling economy manifests in soaring inflation, high unemployment rates, and a significant decline in purchasing power. Businesses struggle to access international markets, secure financing, or even import necessary components for production. The head of Iran’s shipping company has admitted that Western sanctions are hurting the country’s shipping industry, a vital artery for trade and commerce.

For the average citizen, this means a daily struggle to afford basic necessities. Prices for food, medicine, and other essential goods skyrocket due to import restrictions and the depreciation of the national currency. The once-vibrant middle class finds itself increasingly pushed into poverty, as savings evaporate and job opportunities diminish. The economic hardships imposed by these sanctions only further damage fragile civilian infrastructure, hindering investment in vital areas like healthcare, education, and transportation, which directly impacts the well-being and future prospects of the population.

The Humanitarian Toll: A Crisis Unfolding

While the stated aim of sanctions is often to pressure governments, their most devastating impact is frequently borne by the civilian population. The question "are sanctions hurting Iran" takes on a particularly grim dimension when considering the humanitarian crisis unfolding within the country. The U.N. Special Rapporteur on the negative impact of unilateral coercive measures on the enjoyment of human rights, Idriss Jazairy, issued a stark warning in a public statement: “[T]hese unjust and harmful sanctions are destroying the economy and currency of Iran, driving millions of people into poverty and making imported goods inaccessible.” This powerful statement underscores the severe human cost of the economic pressure.

The humanitarian crisis caused by U.S. sanctions in Iran is so dire that it has drawn widespread international concern. Despite claims of humanitarian exemptions for food and medicine, the reality on the ground is far more complex. The intricate web of financial restrictions, fear of secondary sanctions, and the reluctance of international banks to process transactions involving Iran often create an insurmountable barrier to even legitimate humanitarian trade. This effectively makes imported goods, including life-saving medicines and medical equipment, either prohibitively expensive or entirely unavailable.

Poverty and Essential Goods

The direct consequence of the economic strangulation is a sharp increase in poverty. Millions of people, who once enjoyed a reasonable standard of living, are now struggling to meet their basic needs. The cost of living has skyrocketed, while incomes have stagnated or declined. Access to essential goods, particularly specialized medicines for chronic diseases like cancer or rare conditions, becomes a daily challenge. Even when available, the exorbitant prices, driven by the collapsed currency and difficulties in importation, place them out of reach for many families.

Trump's economic strangulation is having devastating effects on the Iranian people, leading to widespread suffering and a decline in public health. This situation highlights a fundamental dilemma in sanctions policy: how to apply pressure on a government without inflicting undue harm on its citizens. For Iran, the answer has been a tragic demonstration of how economic tools, intended for political leverage, can inadvertently create a profound humanitarian catastrophe.

The Broader Impact on Infrastructure

Beyond immediate necessities, the economic hardships imposed by these sanctions only further damage fragile civilian infrastructure. Decades of underinvestment, exacerbated by the inability to access international capital, technology, and expertise, have taken a toll on Iran's public services. Hospitals struggle with outdated equipment and a lack of spare parts. Transportation networks are strained. Water and sanitation systems face challenges in maintenance and expansion. The energy sector itself, despite being the target of sanctions, suffers from a lack of investment in modernizing its infrastructure, leading to inefficiencies and environmental concerns.

This deterioration of infrastructure has long-term implications for Iran's development and its people's quality of life. It hinders the country's ability to recover economically, even if sanctions were to be lifted, and perpetuates a cycle of hardship that extends far beyond the immediate economic pain. The cumulative effect of these pressures makes it clear that the answer to "are sanctions hurting Iran" is not just about the government's finances, but about the very foundations of the nation's societal well-being.

Sanctions as a Tool: Effectiveness and Unintended Consequences

Sanctions are often viewed as a preferred option to enforce behavioral change rather than armed, military combat. They represent a middle ground, a way to exert pressure without resorting to direct conflict, which carries far greater risks and costs. However, the effectiveness of sanctions in achieving their stated political goals is a subject of ongoing debate, and the case of Iran offers a complex study in their limitations and unintended consequences.

While Iran's leaders have stayed defiant in the face of the sanctions, and their substantial economic impact is clear, this defiance suggests that the sanctions have not fully achieved their primary objective of compelling a fundamental shift in Iran's strategic policies. Research conducted on U.S. sanctions in Syria, Yemen, South Sudan, and the Democratic Republic of Congo also indicates a failure in efforts to prevent or limit the continued destabilization of these states, suggesting a broader pattern of limited success in achieving desired political outcomes through this tool.

Government Defiance and Paranoia

One of the critical unintended consequences of stringent sanctions is their potential to entrench the targeted regime rather than weaken it. In Iran's case, the sanctions appear to have made the government more paranoid and removed important incentives to play nice. Faced with external pressure, the Iranian government has often rallied nationalist sentiment, portraying the sanctions as an act of aggression against the entire nation. This can lead to a "siege mentality" where internal dissent is suppressed in the name of national unity against a common external enemy.

Furthermore, sanctions can inadvertently strengthen hardline factions within the government, as they are often better equipped to navigate illicit trade networks and benefit from the black market, while reformist elements who advocate for engagement with the West are marginalized. If the government was not assisting its people through alternative means or demonstrating resilience, the sanctions would have stopped a significant portion of their operations, yet they persist, indicating a complex internal dynamic of adaptation and defiance.

A Global Trend: The Rise of Sanctions

The use of sanctions is not limited to Iran; it's a growing trend in international relations. Yet even outside of Iran, America’s use of sanctions as a foreign defense and deterrence tactic has been growing for years. The Treasury Department estimated that U.S. sanctions have increased by roughly 900% over the past 20 years. This proliferation of sanctions reflects a belief that they are a versatile and less costly alternative to military intervention, capable of targeting specific behaviors or entities without resorting to armed conflict.

However, the increasing reliance on sanctions also raises questions about their long-term efficacy and potential for blowback. Over-reliance on this tool can lead to sanctions fatigue, where targeted countries develop strategies to circumvent them, or it can push them closer to rival powers who offer economic lifelines. The case of Iran, enduring sanctions for four decades, serves as a stark reminder of both the persistence of this policy tool and the complex, often unpredictable, outcomes it can generate.

The Nuclear Deal and Its Aftermath: Trump's "Maximum Pressure"

A pivotal moment in the history of sanctions on Iran occurred in May 2018 when President Trump unilaterally withdrew from the Iran nuclear agreement, the JCPOA. This decision, despite objections from European allies, was followed by an imposition of draconian sanctions that not only prohibited U.S. companies from engaging with Iran but also aimed to cut off Iran's access to the global financial system and oil markets. This "maximum pressure" campaign was designed to force Iran back to the negotiating table for a "better deal," but its immediate effect was to plunge Iran's economy into deeper crisis.

Instead of easing sanctions against Iran, President Donald Trump imposed new ones, systematically dismantling the economic relief that had been part of the JCPOA. This move was particularly devastating because Iran had begun to see some economic recovery after the initial implementation of the nuclear deal, which had lifted many international sanctions in exchange for curbs on its nuclear program. The renewed and intensified sanctions crippled industries, devalued the currency, and significantly escalated the economic pain for ordinary Iranians. The political consequence was also profound: it made the government more paranoid and removed important incentives to play nice, pushing hardliners further into their stance of resistance.

Biden's Dilemma: Continuing Economic Pain

Despite a change in U.S. administration, the question of "are sanctions hurting Iran" remains relevant, as the economic pain has largely continued. Richard Nephew, a former Iran and sanctions official in the Biden administration, now with the Washington Institute for Near East Policy, says Iran's economy is still hurting because the Biden administration has maintained many of the Trump-era sanctions. While the Biden administration expressed a willingness to return to the JCPOA, negotiations have stalled, and the economic pressure on Iran has not significantly eased.

As a senior writer for Foreign Policy and deputy editor for National Security and Foreign Policy noted, the United States once again rolls out sanctions on Iran's oil and gas sector, continuing the economic squeeze. This continuity, even under a different political party, highlights the deeply entrenched nature of the sanctions policy and the challenges of reversing course. For citizens of the revolutionary state, this means ongoing hardship, with little relief in sight, as their nation's economic fate remains intertwined with complex international diplomacy and the unresolved nuclear issue.

Beyond Economics: Geopolitical Repercussions

The impact of sanctions on Iran extends beyond its immediate economic and humanitarian consequences, casting a long shadow over global geopolitics. The persistent pressure on Iran has broader implications for international relations, particularly concerning the dominance of the U.S. dollar and the emergence of alternative power centers. As one analyst put it, a continued policy of isolating Iran risks "losing Iran, you’re losing Russia, China is out there trying to get their currency to be the dominant one, you’re going to lose the dominance of the dollar.” This perspective suggests that aggressive sanctioning can inadvertently accelerate de-dollarization efforts and strengthen alliances among nations seeking to circumvent U.S. financial hegemony.

Furthermore, the sanctions policy has a tangible impact on people-to-people relations. On a recent delegation to Iran, visitors experienced firsthand the legendary Iranian hospitality. Iranians are particularly thrilled to meet Americans, demonstrating a warmth and openness that often contrasts sharply with the official animosity between their governments. However, as discovered by many, our government’s policies are hurting the very people who want to be our friends. This disconnect between policy and public sentiment creates a tragic irony, undermining potential avenues for cultural exchange and mutual understanding, and potentially fostering long-term resentment among a population that feels unjustly targeted.

The Path Forward: Lifting Sanctions and Re-engagement

Given the undeniable fact that "are sanctions hurting Iran" is answered with a resounding yes, and considering their limited success in achieving fundamental behavioral change, many policy experts and international observers advocate for a different approach. Tehran, for its part, insists Washington must suspend those restrictions before nuclear talks can begin, viewing the lifting of sanctions as a prerequisite for any meaningful diplomatic engagement.

A widely discussed alternative path involves rejoining the Iran nuclear agreement, lifting sanctions, and developing normal trade and diplomatic relations with Iran. Proponents of this approach argue that such a move would empower the reformists within Iran, who advocate for greater openness and engagement with the international community. It is believed that by integrating Iran more fully into the global economy, it would gain important incentives to act as a more responsible international actor and engage in solving the conflicts that plague the region. This strategy posits that economic integration, rather than isolation, could be a more effective long-term tool for influencing Iran's behavior and fostering stability in the Middle East.

Conclusion: The Human Cost and Policy Crossroads

The question of "are sanctions hurting Iran" is not a matter of debate; the evidence overwhelmingly confirms their devastating impact. From the crippling of its energy exports and the rapid depletion of foreign exchange reserves to the widespread humanitarian crisis driving millions into poverty and making essential goods inaccessible, the economic strangulation is undeniable. While intended to compel a change in government behavior, these measures have often inadvertently strengthened hardline elements, fueled paranoia, and caused immense suffering among the Iranian populace, who, despite governmental policies, often harbor goodwill towards the very nations imposing these restrictions.

The experience of Iran, enduring decades of pressure, serves as a critical case study in the effectiveness and ethical implications of sanctions as a foreign policy tool. While sanctions are seen as a less violent alternative to military conflict, their human cost can be profound and their political efficacy often limited. As the world grapples with complex geopolitical challenges, the Iranian sanctions saga underscores the urgent need for policymakers to critically evaluate the long-term consequences of such measures, weigh their humanitarian toll against their strategic objectives, and explore alternative paths that prioritize engagement, dialogue, and the well-being of ordinary citizens. The crossroads for Iran and the international community lies in deciding whether continued pressure or a renewed path of diplomacy and economic re-engagement offers the best hope for stability and a better future for the Iranian people.

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