Have sanctions against Iran worked? Clearly, they’ve had an impact on the economics of the country. Inflation is over 42% annually, and the Rial is down more than 50% in the past three years. Oil exports fell from 2.5 million barrels per day in 2017 to under 0.4 million barrels per day in 2020.
However, when we consider the recent discovery of American-made electronic components in Iranian drones used by Russia, how did the Islamic Republic access American-made electronics, and what else have they gotten?
Sanctions work when trade routes and financial transaction methodologies are monitored seriously. Since the Islamic Republic has a military procurement program on every continent on the globe, cheating the system and tapping into international smugglers, spies, and black-market profiteers is a reality.
When American companies and even high-ranking former U.S. government employees are supplying Iran from auctions held by U.S. military surplus, the goods pass through different countries on the way to Iran. Iran continued to purchase F14 parts indirectly from the U.S. military post-sanctions. Iran’s F-14s were so embarrassing for the U.S. military that in 2005 they retired the entire fleet and shredded their F14s into pieces. Iran is still flying them.
Iran is also becoming quite expert at reverse engineering products and mixing and matching components from different vendors. While it might not be military-grade technology, it’s often good enough. The U.S. government seems clueless about how drone electronics are making their way into Iran. Now the White House is investigating with yet another task force.
There are other factors at work. Iran’s economy is starting to grow based on oil income from China. Of course, the oil is said to be from Malaysia, Oman, and the United Arab Emirates, not from its actual source, Iran. China is beginning to discuss its import of Iranian crude openly despite sanctions. While trade with China and Russia will help Iran, the sanctions will still have their impact.