US Sanctions Are Draining Iran's Economy But Struggling to Shift Its Regional Strategy

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US sanctions and pressure on Iran are becoming an escalating test of Tehran's economic resilience and regional influence, as Washington moves to widen a policy of "economic isolation" that targets not only Iran's economy but also the countries and channels helping it evade restrictions, according to a report by Al-Ghad.اضافة اعلان

The sanctions have proven effective at draining Iran's economy and raising the cost of trade, energy and financial transfers, but their power to alter Tehran's political and strategic behavior remains far less certain, given Iran's tools for adapting to and circumventing the restrictions and the continued backing it receives from other powers, political and strategic analysts told Al-Ghad.

The analysts said the equation extends beyond the economic damage sanctions inflict on Iran to whether that pressure can shape the regime's calculations and regional policy. They warned that sustained pressure without a clear political track could push Tehran toward greater hardline positions or prompt it to use retaliatory tools that raise the risk of regional escalation.

Conversely, they said, if Washington succeeds in closing the channels Iran uses to bypass sanctions, particularly through neighboring states and financial networks, the cost of continuing its current policies would rise and could gradually push Tehran to recalculate, making sanctions more a tool of negotiating leverage than a sufficient means of forcing sweeping strategic change on their own.

A Risk-Laden Approach
Badr al-Madi, a professor of political science at German Jordanian University, said US economic sanctions have shown a strong capacity to affect Iran's economy, noting that Washington has extensive experience deploying this tool when military options are too risky or unlikely to achieve the desired political outcomes.

Al-Madi said that after weeks of direct military confrontation with Iran failed to spur Iranian street pressure against the regime, the United States pivoted to intensifying economic pressure, this time through a broader "economic isolation" policy that targets not just Iran and its economy but also the states and institutions that help it dodge sanctions.

He said tightening pressure on Iran's neighbors has already produced visible effects, with mounting economic burdens on the regime and rising domestic discontent that could fuel further instability or push Tehran toward negotiation and a change in behavior.

Al-Madi said Iran is entering a difficult period as Washington seeks to sustain economic pressure, including by narrowing Iran's economic channels with neighboring countries, particularly Iraq, Turkey, Pakistan, Afghanistan and Armenia, some of which he said have served as economic lifelines that helped Tehran offset the impact of sanctions in recent years.

He added that the sanctions' ability to change Iranian behavior will depend on how effectively the United States can close off avenues for evasion, and that continued pressure and its accumulating economic and social effects could raise the cost of Iran's current policies and eventually force the regime to recalculate, with implications for regional security and stability.

Iran's Economy Weakened, But Strategy Largely Unchanged
Bashir al-Daja, a security and strategic affairs expert, said that with military options offering limited prospects for a decisive outcome, Washington's "economic isolation" policy has clearly weakened Iran's economy but has yet to translate that pressure into a fundamental shift in Tehran's political and strategic decision-making.

Al-Daja said accumulated sanctions, along with restrictions on oil exports, banking difficulties, currency depreciation, rising prices and contracting trade, have placed heavy pressure on the Iranian state and society. But he said Tehran's ability to adapt and circumvent sanctions through informal economic and financial networks, while maintaining channels for oil exports, has limited the sanctions' potential to trigger political collapse.

He added that the severity of sanctions has pushed Iran in recent years to build a parallel economy, networks of intermediary companies and alternative routes for transport and financial transfers, with China emerging as a primary outlet for Iranian oil exports that has allowed Tehran to preserve a significant share of its revenue despite US pressure.

Al-Daja said the current phase appears more difficult for Iran as US pressure shifts from targeting Iranian entities directly to pursuing the networks, companies and financial channels that help Tehran access markets and financing, which raises the cost of sanctions evasion and narrows Iran's room to maneuver. He said the real impact of sanctions lies not necessarily in halting Iran's economy outright but in raising its operating costs, through higher transport, insurance, brokerage and transfer expenses and reduced oil, investment and trade revenue, which weakens the government's ability to fund imports, balance its budget and stabilize its currency.

However, Al-Daja cautioned that a weaker economy does not automatically translate into changed strategic behavior. He explained that Iran views its regional influence and network of allies as part of its national security architecture and deterrence strategy, not simply as discretionary spending it can easily abandon. Tehran may be forced to cut funding or reallocate resources, he said, but it is unlikely to give up its tools of regional influence under sanctions pressure alone.

He added that sanctions could become more effective if paired with military pressure and disruption to trade and energy channels, but that this would also raise the risk of escalation, since Iran could respond through other means, including pressure on shipping and energy routes, cyberattacks, indirect military escalation or activating its regional networks.

Al-Daja warned that sustained economic pressure without a clear political path could backfire by reinforcing nationalist sentiment in Iran and turning sanctions into a rallying point against the United States. He also warned that Iran's middle class, private sector and ordinary citizens could bear the brunt of the cost, while state-linked institutions and security agencies adapt more easily through the shadow economy.

He identified four factors that will determine whether sanctions can change Iranian behavior: Washington's ability to close evasion channels, whether China continues purchasing Iranian oil, Tehran's ability to preserve internal cohesion, and the existence of a diplomatic track offering real incentives in exchange for verifiable concessions on Iran's nuclear, missile and regional files.

Al-Daja said the regional interest, including Jordan's, does not lie in Iran's economic collapse at any cost, but in pushing it toward more stable behavior that poses less of a threat to its neighbors.

He warned that any major escalation between Washington and Tehran would affect energy, shipping, trade and investment prices and regional security, with direct consequences for Arab economies. "The strategic goal should not be to starve Iran, but to change its calculations," Al-Daja said, adding that sanctions are a powerful economic weapon but cannot alone overturn a national security doctrine built over decades.

The Strait of Hormuz as a Pivotal Factor
Khaled Shneikat, head of the Jordanian Political Science Association, said the "economic isolation" policy is having a devastating effect on Iran's economy, but added that its success depends on several factors, chief among them the Iranian government's ability to manage the economic strain caused by US sanctions.

Shneikat said the level of cooperation from China and Russia, along with any other countries that refuse to join the economic blockade on Iran, is a key factor in determining how effective the sanctions can be. He said Tehran's capacity to secure alternative partnerships and economic arrangements outside the sanctions framework will shape the outcome of Washington's pressure campaign.

He added that the Strait of Hormuz is central to the equation, since its significance hinges on Iran's ability to influence oil supply flows through the waterway.

According to US statements, Shneikat said, large numbers of vessels continue to pass through the strait carrying millions of tons of cargo weekly, which, if accurate, suggests Iran's capacity to disrupt shipping there may be limited.

At the same time, Shneikat said that if Iran were able to tighten control over the Strait of Hormuz and disrupt shipping through it, the consequences for the global economy, including the US economy, would be significant due to rising oil prices, which could push Washington to reconsider parts of its economic policy toward Tehran.

He described the strait as the "critical hinge" in the US-Iran economic confrontation, given its importance to global energy supply chains and the potential for any disruption there to have effects reaching well beyond the two countries.

Shneikat said Washington has shifted its priorities from direct military force toward greater reliance on economic tools, noting that the United States previously used this approach against Iraq between 1991 and 2003, as well as in dealing with Venezuela and Cuba.