Iran’s economy, already teetering on the brink with severe water and power shortages, massive budget deficits, and a rapidly devaluing currency, is now staring down an even bleaker future.
The United Nations Security Council delivered a fresh blow on Saturday, reimposing stringent sanctions on Iran due to its nuclear program. This decision came after a week of intense diplomatic talks at the General Assembly failed to yield any breakthrough.
These new UN sanctions are even more extensive than the existing American ones. They originated from a fundamental disagreement with Europe regarding Tehran’s commitment to the 2015 nuclear agreement with Western nations, particularly after Iran blocked international inspectors from its nuclear facilities following military strikes by Israel and the United States in June.
Secretary of State Marco Rubio announced the sanctions officially commenced at 8 p.m., stating that the move “sends a clear message: The world will not tolerate threats or half-hearted compliance — Tehran will face the consequences.”
The fresh round of sanctions imposes a freeze on assets and a travel ban on various Iranian entities and individuals. Furthermore, it empowers nations to intercept and inspect cargo originating from Iran, whether by air or sea, particularly on government-owned vessels like oil tankers.
Beyond financial measures, these sanctions forbid Iran from all uranium enrichment, the launch of ballistic missiles capable of carrying nuclear warheads, and the transfer of ballistic missile technology. A full arms embargo has also been reinstated.
Iran’s President, Masoud Pezeshkian, vehemently denounced the sanctions, labeling them “unjust and illegal.”
During a Friday briefing with reporters in New York, he asserted, “They want to overthrow us. If you were in our shoes, what would your response be?”
Tehran has yet to announce its response to these new restrictions. President Pezeshkian indicated that a decision would be made upon his return to Iran after consulting with other high-ranking officials. In an immediate diplomatic move, Iran’s Foreign Ministry recalled its ambassadors from France, Britain, and Germany for urgent consultations on Saturday.
While hard-line elements within Iran have advocated for a withdrawal from the Nuclear Nonproliferation Treaty—a step that would inevitably provoke international alarm by dismantling key safeguards—President Pezeshkian, a known moderate, swiftly dismissed this idea as unviable.
These new sanctions could not have come at a worse time for Iran.
The nation is still recovering from a devastating 12-day conflict with Israel in June, which concluded with US bunker-buster bombs severely damaging three of Iran’s nuclear sites. Concurrently, the Iranian government has been struggling for months with a severe energy and water crisis, necessitating forced outages and supply reductions across numerous cities.
Naysan Rafati, a senior Iran analyst at the International Crisis Group, noted that while these UN sanctions “might not carry the same immediate financial punch as current US measures, they will undoubtedly intensify the already immense pressure on Iran’s economy.”
The 2015 nuclear agreement, designed to curtail Iran’s nuclear ambitions, had previously lifted UN sanctions that were in place between 2006 and 2010. However, the deal included a “snapback” provision, allowing these sanctions to be reimposed if Iran breached its terms before October 2025.
Had that original deadline passed without incident, the snapback clause would have automatically expired, effectively terminating the sanctions. Yet, in a decisive move this August, France, Britain, and Germany activated the mechanism, accelerating the deadline to September 28.
Europe’s accusations against Tehran include violating the 2015 accord by escalating uranium enrichment from 3.5% to 60%, amassing a 400-kilogram stockpile of highly enriched uranium (sufficient for several nuclear bombs if weaponized), and denying access to international inspectors after the recent airstrikes.
Iranian officials insist their nuclear program is solely for peaceful applications. They argue that accelerated enrichment was a direct response to the United States’ unilateral withdrawal from the nuclear agreement in 2018 under President Trump, who branded it “a horrible one-sided deal” despite Iran’s full compliance at the time. When Europe subsequently halted trade with Iran to adhere to US sanctions, Iranian officials viewed this as a breach of Europe’s commitments under the original deal.
During the briefing, President Pezeshkian reiterated Iran’s stance, asserting that it has no intention of developing nuclear weapons and voiced his astonishment that the international community seemed unwilling to believe this. He also made it clear that Iran would not simply capitulate to the demands of the US and European powers, stating, “We will not accept this.”
Further criticism from European nations has centered on Tehran’s post-airstrike decision to suspend cooperation with the International Atomic Energy Agency, effectively blocking inspectors from Iran’s nuclear facilities.
To avert these new sanctions, Europe had presented Iran with three specific demands: grant immediate access to international inspectors, disclose the precise location of its 400-kilogram stockpile of highly enriched uranium, and engage in direct nuclear negotiations with the United States.
President Pezeshkian affirmed Iran’s willingness to cooperate with the Europeans, stating, “whether it’s with the international atomic agency, or about the stockpile of enriched uranium and the inspectors to come and investigate.”
He further elaborated in Saturday’s briefing and media comments that Iran had agreed to both negotiations and inspector access. However, he deemed the US demand—that Iran surrender its entire 400-kilogram uranium stockpile in exchange for a mere three-month suspension of snapback sanctions—as utterly unreasonable.
Iran’s key allies and permanent Security Council members, Russia and China, attempted on Friday to postpone the sanctions by six months, seeking to push the deadline to April. However, this proposal was rejected, with nine nations, including Britain, France, and the United States, voting against it.
Both Russia and China have publicly declared the snapback mechanism illegitimate, signaling their intent to mitigate the sanctions’ impact by maintaining trade relations with Iran. Notably, Russia and Iran share strong military ties, with Iran supplying Russia with drones currently deployed in the conflict in Ukraine.
Economically, China and Iran are closely linked. China serves as the primary buyer of Iranian oil, securing crude at a significant 20% discount, a crucial lifeline keeping the Iranian government financially viable.
According to a senior official in Iran’s Oil Ministry, these new sanctions won’t halt China’s oil purchases but will introduce additional complications. The official suggested that China might leverage these new restrictions to demand even deeper discounts, perhaps by citing increased risks of Iranian oil tankers being intercepted and impounded in international waters.
Conversely, some Iranian political figures have downplayed the sanctions’ potential impact, asserting that the nation has already adapted to existing restrictions and will find new strategies to navigate the latest measures. They also shifted blame to the West, accusing Europe and the U.S. of lacking genuine interest in a diplomatic resolution.
Mahdi Mohammadi, a conservative senior adviser to the head of Iran’s Parliament, declared in a social media post: “They have made their decision, now we must make our decision, too. The only way is to become strong to a level that erases the idea of Iran surrendering to the enemy.”
Despite such rhetoric, Iran’s economy has sharply declined in recent years, a consequence of not only American sanctions but also rampant mismanagement and corruption. On Saturday, news of the new sanctions immediately sent shockwaves through Iranian markets, causing the rial to plunge by 4 percent to an astounding 1,126,000 against the dollar in the black market, a rate widely recognized as the true indicator of inflation.
The news landed particularly hard on ordinary Iranians, who are already battling an inflation rate exceeding 40%, escalating unemployment, and deep uncertainty about their nation’s future. Many live in constant fear of renewed conflict with Israel and the US, as the standoff between their government and Western powers persists.
Mehdi Bostanchi, head of Iran’s Council of Industries, revealed in a Tehran interview that businesses nationwide are preparing for a significant drop in consumer demand. He anticipates greater obstacles in sourcing foreign goods, coupled with tighter restrictions on insurance, banking, and international shipping.
“These restrictions,” Bostanchi explained, “will create a detrimental ripple effect.” He emphasized that the heaviest burden would fall on small and medium-sized enterprises, which collectively represent over 90% of Iran’s industrial sector and nearly half of its industrial workforce.
Leily Nikounazar contributed reporting from Belgium, and Edward Wong from Washington.