The economic growth of Iran has been trapped around international sanctions since after the Iranian Revolution in 1979, making the country stand isolated in international financial markets. Iran is the 7th key producer of oil in the world, holding a significant position in international oil markets. The country is also enriched with hydrocarbons, uranium ores and agricultural production. Despite all these enrichment, Iran is sanctioned by the U.N, U.S. and E.U for trading purposes. Iranian nuclear program is the major reason behind Iran holing international sanctions. Another reason for International sanctions on Iran is the country’s support for U.S. recognized terrorist organizations including Hezbollah, Hamas and Palestine Islamic Jihad. The outcome of these sanctions have made country undergo high inflation, high unemployment rates and currency depreciation as well.
Iran has been under international sanctions in the sectors of trade, economy and nuclear program since 1979. After the Iranian Islamic Revolution, the country faced political and economic sanctions by U.S. for 1979-81 Iranian hostage crisis, freezing all Iranian assets that were under the jurisdiction of U.S. The U.S. further declared Iran as the state sponsor of terrorism in 1984, after Hezbollah (a Lebanon group backed-up by Iran) attacked U.S. marine base in Beirut with bombs. At that time, the U.S. declared sanctions on Iran in various sectors including nuclear development program, oil exports, banking & finance. The U.N and E.U also sanctioned Iran in economic, trading and nuclear program sectors, following the sanctions of U.S. on Iran. These sanctions were made to make Iran economically isolated in international markets, entrapped around international sanctions. As a result, currency of the country depreciated, leading to high rates of inflation and unemployment.
Iran’s economic growth has been under the influence of economic instability because of international sanctions. Imposition of these sanctions on Iran affected daily life of civilians, impacting the internal and external affairs of the state as well. The economic crisis in the country are still impacting the country’s economic growth, entrapped by the influence of international sanctions.
Imposed international sanctions on Iran are adversely impacting the country’s oil exports in global oil markets. Iran’s oil-dominated economy is estimated to be $483 billion. However, China doesn’t recognize sanctions imposed by the Western world, making it possible for China to export oil from it’s 3rd major exporter of oil. China is the biggest customer of oil for Iran and Iran’s major oil revenue relies on China. According to a report, Iran sold an average of 1.05 millions barrel per day (bpd) to China from January-October in 2023, comparing to the Iran’s average oil production capacity of 2.9 millions bpd in 2023.
In the history of these nuclear, political and economic sanctions on Iran, the country adopted the policy of “resistance economy” in an attempt for its economic growth. The economy was introduced by the supreme leader of Iran, Ayatollah Ruhollah Khomeini, in order to reduce the impact of foreign pressure on Iran’s economy. The policy emphasized on the promotion of production of daily life goods in the country. Khomeini’s policy of “resistance economy” was based on the use of domestic goods instead of imported ones and imposing the ban on the import of luxury accessories as well. The policy was made to fulfill the daily need of individuals of the country.
The economic uncertainty in Iran is still increasing day-by-day, as the country is supporting Hamas and Hezbollah in the ongoing Israel-Palestine conflict. The U.S. and the E.U. are planning to implement more sanctions on Iran after country’s second direct missile attack on Israel this year. The geopolitical tensions in the middle-east will be affecting every part of Iran’s economy. Implementation of more sanctions on Iran will lead to the more economic crisis in the country, raising questions for its potential impact on the country.
What will be the cost of further international sanctions for Iran? Will Iran continue it’s support for Hamas and Hezbollah besides international pressure? What are the potential sanctions that can be further approved for Iran internationally?
The nuclear program of the Islamic Republic of Iran is the main concern for Western world. International sanctions imposed by the Western world can be considered as the part of Western aggression on Iran and Iranian nuclear program. The major threat of Western world is associated with the ambitions of the Iranian government to use its nuclear program against the Western world. These nuclear sanctions include the ban on trade of weapons with Iran, manufacturing of ballistic missiles and other scientific and technological inventions in the country.
The history of international sanctions on Iran dates back to the 1979 Islamic Revolution in the country. The sanctions imposed by the Western world have costed the country to become economically isolated in today’s globalized world, entrapped around the International sanctions. Although, the country adopted policy of “resistance economy” for stabilizing its economy, but there is need of more economic policies to be implemented for its economic growth. The economic uncertainty of the country is increasing day-by-day with escalating tensions of Israel-Palestine conflict, leading towards Israel-Iran war. Iran’s support for Hamas and Hezbollah is growing concerns for further International sanctions on the country.
She is an undergraduate student of Political Science in International Islamic University, Islamabad.
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