Sanctions on Iran

Iran has been under some form of US sanctions since the hostage crisis of 1979, and from 2006 also under UN and then European measures aimed mainly at its nuclear programme. At their peak in 2012 and again after 2018 they cut Iran’s oil exports and its access to the world banking system. Supporters say sanctions pushed Iran to negotiate; critics say they hurt ordinary Iranians far more than the government.

Layers built up over four decades

Iran’s sanctions are not one law but layers added by different governments for different reasons: the hostage crisis, terrorism, the nuclear programme, missiles and human rights.

1. 1979–1981 After the US embassy seizure, President Carter freezes Iranian assets and bans trade; most measures are lifted by the Algiers Accords in 1981.
2. 1984–1987 Iran is designated a state sponsor of terrorism; the US bans imports of Iranian goods.
3. 1995–1996 President Clinton bans almost all US trade and investment; Congress passes the Iran and Libya Sanctions Act, threatening foreign firms that invest in Iran’s oil and gas sector.
4. 2006–2010 Four UN Security Council resolutions restrict nuclear and missile trade and freeze assets of named people and firms.
5. 2010–2012 The US targets banks worldwide that deal with Iran’s central bank; the EU bans Iranian oil imports and Iranian banks are cut off from the SWIFT messaging system.
6. January 2016 Most nuclear-related UN, EU and US “secondary” sanctions are lifted under the JCPOA.
7. 2018–2019 The US leaves the deal and reimposes sanctions in August and November 2018 as part of a “maximum pressure” campaign; in 2019 it designates the Revolutionary Guards a terrorist organisation.
8. September 2025 UN sanctions are restored after Britain, France and Germany trigger the deal’s “snapback” provision; Iran, Russia and China reject the move.

How the pressure works

The most powerful tool has been “secondary” sanctions: the United States cannot stop a French oil company or an Indian bank from trading with Iran, but it can cut them off from the American financial system if they do. Since almost all large banks need access to the dollar, many foreign firms left Iran even when their own governments did not require it, a pattern called over-compliance. Other measures target the Revolutionary Guards, shipping companies, the central bank, steel and petrochemical exports, and individuals accused of human rights abuses.

Oil exports fell from about 2.5 million barrels a day in 2011 to around 1 million in 2013, recovered after the 2015 deal, and fell again after 2018 to a few hundred thousand barrels a day officially. Much of Iran’s oil then went to China through intermediaries, at a discount.

What sanctions did to daily life

For ordinary Iranians the main effect has been through the currency and prices. Each time sanctions tightened, the rial fell, imports became more expensive and inflation rose. In 2012 the rial lost more than half of its value against the dollar; after 2018 it fell sharply again, and in 2025 the open-market rate passed one million rials to the dollar. Iranians speak of گرانی (gerani), the constant rise in prices, as the defining experience of these years. Salaries and pensions lost buying power, savings in rials melted away, and many families moved money into dollars, gold, cars or property. To make sense of rial and toman prices, see Iranian currency.

Medicine and humanitarian goods

Food and medicine are formally exempt from US and EU sanctions. In practice, banks’ unwillingness to handle any Iranian payment made imports of some medicines and medical equipment difficult. Human Rights Watch, in a 2019 report, said US sanctions were harming Iranians’ right to health, including patients with rare diseases and cancer; the US government said the exemptions were adequate and blamed Iranian mismanagement. A UN Special Rapporteur on the impact of sanctions made similar criticisms after visiting Iran in 2022.

Industry, flights and daily inconvenience

Car makers lost foreign partners, airlines struggled to buy spare parts for ageing planes, and international payment cards stopped working, so foreign visitors have to carry cash. Iranians abroad often cannot easily send or receive money through banks and rely on informal money transfer networks. Online services from some foreign companies became unavailable to users in Iran, adding to restrictions imposed by Iran’s own government.

Who gains and who loses

Economists such as Djavad Salehi-Isfahani have shown how sanctions periods coincided with rising poverty and a shrinking middle class. At the same time, the need to work around sanctions gave an advantage to organisations with political connections, such as businesses linked to the Revolutionary Guards and large foundations, which could use smuggling routes, front companies and their own ports. Some Iranian critics of the government argue that sanctions have therefore strengthened the very institutions they target.

Do sanctions work?

This remains one of the most argued questions about Iran. Supporters, in Washington and elsewhere, point out that the pressure of 2010–2013 helped bring Iran to the negotiations that produced the 2015 deal. Critics answer that “maximum pressure” after 2018 did not produce a better deal or change Iran’s regional policies, but pushed Iran to expand enrichment, while weakening the middle class that often supported reform. Iran’s leaders, for their part, promoted a “resistance economy” and closer trade with China and Russia. For the economic background, see the economy of Iran; for the diplomacy, Rouhani and the nuclear deal and Iran’s nuclear programme. Hardship caused by price rises fed the protests described on the protests of 2017–2019.