Masoud Barati, author of The Economic War and expert in the field of sanctions
The Leader of the Islamic Revolution, during a meeting with students, referenced negotiations in the 2010s aimed at lifting sanctions and remarked on their diminishing impact: “Fortunately, the sanctions are becoming less effective globally. When sanctions continue, they gradually lose their impact. They themselves have admitted this. That is, they too have acknowledged that a country that’s been sanctioned can gradually find ways to counteract the sanctions.”
But why are sanctions losing their effectiveness? Is this a factual reality or merely a political narrative? As the Leader of the Islamic Revolution noted, the reduced efficacy of sanctions in recent years is not a claim made solely by Iranian experts or officials. Western officials and analysts, particularly Americans, have also acknowledged this. In recent years, two major international experiences — Iran and Russia’s resistance to sanctions — have led many experts to conclude that sanctions are not as effective as once assumed. They fail to exert sustained, long-term pressure or achieve the intended political or economic goals. Economically, sanctions have not met their objectives (this does not mean sanctions are entirely ineffective, but rather that their economic aims remain unfulfilled). Politically, they have also failed to alter the behavior of targeted actors.
Reasons for the diminishing effectiveness of sanctions from a Western perspective
Understanding the reasons behind this trend is critical. Richard Nephew, author of The Art of Sanctions and known in Iran as an architect of sanctions, argued in a pre-Trump era article titled “Easier Said Than Done: Renewing Maximum Pressure on Iran” that reviving maximum pressure policies is no longer feasible. He cites two primary factors: Iran’s refusal to negotiate under pressure and shifts in international dynamics. In a later article, “Before Maximum Pressure, Trump Needs an Iran Strategy,” he predicted that Trump’s pressure campaign would mirror Biden’s approach. More recently, in “A Last Chance for Iran,” Nephew, as someone well-versed in sanctions and their impact, even suggests Trump to prioritize military threats over sanctions-backed diplomacy.
“The diminishing effectiveness of sanctions” in the US National Security Presidential Memorandum
The reality of weakening sanctions is also reflected in the “National Security Presidential Memorandum” signed by Trump against Iran. This document outlines the US strategy across all dimensions of its challenge with Iran. Two key points highlight the diminishing impact of sanctions: First, the Treasury Department’s primary task is to combat “sanctions evasion,” leveraging FATF standards to identify ultimate beneficiaries and customer identities — measures Iran has (fortunately) not yet adopted. This shift indicates that new sanctions hold little value, and the focus is now on countering Iran’s workarounds. Second, responsibility for countering Iran’s oil sales was assigned to the State Department, not the Treasury, acknowledging the inefficacy of sanctions in this realm. Trump hoped diplomatic tools could sustain maximum pressure, a strategy Biden had already tried without success.
Technical explanation for the diminishing effectiveness of sanctions
From a technical perspective, the "diminishing effectiveness of sanctions" can also be explained. To summarize, it is essential to note that a sanctioning country requires a "source of power" to enforce effective sanctions. The US leverages two primary sources of power: its "large economy" and the "US dollar." In recent years, the US has predominantly relied on the dollar’s dominance. For instance, in sanctioning Iran’s oil exports, the US has targeted financial transactions used to settle payments for Iranian oil purchases. It has threatened to cut off offending banks and financial institutions — including third-party central banks — from accessing the US banking system and using the dollar.
The important point is that this source of power used for sanctions has a defined scope of influence. It can target activities within this scope, but if the targeted activity occurs outside this scope, it cannot be effectively sanctioned. For example, in the case of Iran’s oil sales, if the financial settlement for purchasing Iranian oil takes place outside the network of banks and financial institutions tied to the US financial system, the sanctions fail to achieve their goal. In other words, the leverage over such activities becomes ineffective. The same pattern applies to oil transportation. The US primarily relies on insurance-related mechanisms and employs satellite tracking or other methods to detect sanctions evasion.
Other short-term methods, referred to as "sanctions evasion," are also employed. Most of these methods rely on designing "deception points." However, sanctions evasion lacks the capacity to address the mid- and long-term needs of the economy, necessitating a shift toward neutralizing sanctions or exiting the scope of their influence. Iran’s vulnerability during the first phase of Trump’s maximum pressure campaign in 2017–2018 stemmed from mistakenly abandoning sanctions-neutralization strategies in favor of a false hope that agreements would lift sanctions. Instead, Iran pursued foreign economic relations entirely within the scope of sanctions’ impact.
Another factor relates to shifts in the international landscape. In recent years, heightened tensions between states seeking to alter the global order and the US and its allies have expanded the scope of Western sanctions to include countries like Russia. Additionally, rising US-China tensions have further strained relations. Other nations, such as BRICS members, have shown greater interest in insulating themselves from the reach of sanctions. This dynamic has created opportunities for Iran to forge partnerships with these countries, thereby undermining the effectiveness of sanctions.
Conclusion
The diminishing effectiveness of sanctions is a tangible reality, evident in Iran’s foreign trade statistics, oil sales, and the experiences of countries like Russia. A scientific approach to sanctions, combined with lessons from successful counterstrategies, will further reduce their impact until they cease to affect the national economy altogether.
(The views expressed in this article are author’s own and do not necessarily reflect those of Khamenei.ir.)
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