The impact of the new round of US sanctions against Iran extends far beyond the bilateral relationship between the United States and Iran. These sanctions will not only exacerbate economic hardship and existential problems in Iran but also transmit their consequences to the region and globally through energy, trade, finance, and supply chain sectors.
As the costs of sanctions continue to spread, the United States seeks to achieve its strategic goals through economic pressure; however, ultimately, it may shift risks and costs onto its allies and developing countries, creating a situation where 'the United States applies pressure, but the world bears the costs.'
US sanctions against Iran, along with the threat of a new round of sanctions, will further aggravate Iran's economic problems and intensify pressure on livelihoods. Since the start of the conflict between the US and Iran in late February, Iran's domestic economy has continued to deteriorate. Recently, the Iranian rial fell below the level of 2 million rials per US dollar, while prices within Iran sharply rose, increasing the cost of living for ordinary citizens.
This new round of pressure from the US on Iran will further intensify the country's economic difficulties and the burdens faced by its population.
New US sanctions against Iran will lead to increased anxiety in international energy markets. Although the intensity of the conflict between the US and Iran was gradually decreasing, there were broad expectations of renewed dialogue between the two sides, and the United States even hoped to gradually lift the blockade and sanctions against Iran. However, instead of reducing military pressure on Iran, Washington has increased economic pressure by expanding and strengthening the scope, areas, and tools of sanctions.
This has raised concerns in the international community about the possibility of a renewed flare-up of conflict between the US and Iran. Against this backdrop, heightened concerns will contribute to rising global crude oil prices, and anxiety in international energy markets will help maintain high energy prices.
US financial sanctions against Iran, especially the requirement for other countries to choose sides, will increase production costs in international energy markets. Despite the United States maintaining an economic blockade against Iran for a long time, regional countries have continued to maintain economic ties with Iran through various channels, sustaining close relations with the country in finance, transport, manufacturing, chemical industry, energy, infrastructure, and other sectors.
As the United States increases pressure on Iran, demanding that other countries make a choice, regional states will be forced to reconsider their economic relations with Iran. Under US pressure, they may be compelled to reduce or restructure their economic ties with Iran. Given the war and the negative impact the conflict between the US and Iran has had on regional economies since late February, regional countries, especially Gulf states, will inevitably incur new economic costs when adjusting their relations with Iran. This, in turn, will affect fluctuations in international economic and energy markets.
More importantly, the new US sanctions have consequences for the United States itself. The expansion of sanctions against Iran will sustain high global energy prices for a long time. Since the petrochemical industry is an important component of the international energy system, its prices will remain high, which will further increase production costs in other sectors. This will be particularly noticeable for agricultural resources such as fertilizers, which are closely linked to the petrochemical industry. Constantly high fertilizer prices, in turn, will increase agricultural production costs and raise global food prices.
For the United States itself, prolonged instability in the Middle East and the escalation of sanctions against Iran will inevitably increase agricultural production costs, leading to higher domestic agricultural prices and further fueling inflation. This will increase the cost of living for Americans and contribute to growing public discontent, ultimately having an adverse effect on the economy and the domestic political situation in the US.
However, the greatest damage caused by the new round of economic sanctions against Iran and their broader economic consequences will ultimately be borne by developing countries. The United States may shift the costs of rising prices onto its regional allies, especially by requiring Arab Gulf states to shoulder enormous expenses related to US economic reconstruction, military reconstruction, and sanctions against Iran. As price increases and inflationary pressure intensify in the United States, the costs will eventually be redistributed through the financial and economic systems dominating the US, forcing developing countries to bear the consequences of economic pressure emanating from Washington. The United States does not need to directly 'pay' for sanctions against Iran, whereas the costs caused by the economic sanctions will ultimately be borne by the entire world.