TEHRAN — For the people of Iran, the weight of years of American sanctions has not lifted. The measures, first imposed after the 1979 hostage crisis and dramatically expanded following the 2018 withdrawal from the nuclear deal, continue to shape daily life in the Islamic Republic. The United States has long wielded sanctions as its central tool to pressure Iran into changing its behavior.
But that strategy, enforced most aggressively after the 2018 withdrawal, also deepens hardship for ordinary Iranians. Since 2018, the numbers tell a stark story: oil exports, which stood at 2.5 million barrels per day in 2017, fell to below 500,000 barrels per day by 2020.
Iran’s economy contracted by 6.8 percent in 2018 and by another 7.4 percent in 2019.
A History of Pressure
The rupture began with the 1979 hostage crisis, when the United States cut economic ties. But the real escalation came in 2018, when Washington withdrew from the Joint Comprehensive Plan of Action — the nuclear agreement that had lifted many sanctions in exchange for limits on Iran’s atomic program. Washington reimposed sweeping measures, targeting Iran’s oil sales, banking sector, and access to international finance.
The impact on the ground has been severe. Inflation hit 40 percent in 2020.
The Iranian rial lost more than 80 percent of its value against the U.S. dollar since 2018. Food and medicine shortages have grown as the country struggles to pay for imports. Europe attempted to offer a workaround.
The EU launched the INSTEX mechanism in January 2019, designed to facilitate non-dollar trade with Iran and keep channels open for humanitarian goods. But it had limited success, never handling large volumes of transactions.
The Toll on Iran’s Economy
The oil sector, the backbone of Iran’s economy, was hit hardest. The drop from 2.5 million barrels per day to below half a million meant billions of dollars in lost revenue. That collapse fed the broader economic contraction — 6.8 percent in 2018, then 7.4 percent in 2019 — and sent inflation soaring.
The rial’s plunge made imports more expensive, pushing up prices for everything from raw materials to food and medicine. Ordinary Iranians found their savings eroding and their purchasing power shrinking.
Human Consequences
The economic pain has spilled into the streets. In November 2019, a government decision to raise fuel prices sparked nationwide protests. The demonstrations were met with a violent crackdown, leaving many dead and injured, according to reports at the time.
The unrest was a direct consequence of the financial pressure building under sanctions. For families across Iran, the combination of high inflation, currency collapse, and shortages means that even basic necessities are harder to afford.
The sanctions may be aimed at the regime, but they hit the population hardest.
