New sanctions on Iran: What, why, likely impact

The U.N. sanctions are more sweeping than the current American sanctions against Iran. They stem from a dispute with Europe over Tehran’s adherence to the 2015 nuclear accord with Western powers and Iran’s decision to bar international inspectors from its nuclear sites after strikes by Israel and the United States in June.

U.S. Secretary of State Marco Rubio confirmed that the U.N. sanctions had gone into effect. In a statement, he said the decision “to restore these restrictions sends a clear message: The world will not acquiesce to threats and half measures — and Tehran will be held to account.”

The new sanctions freeze assets and ban travel for a range of Iranian entities and individuals, and authorize countries to stop and inspect cargo traveling from Iran by air and sea on Iranian government vessels, including oil tankers.

The sanctions also prohibit Iran from enriching uranium at any level, launching ballistic missiles with nuclear warhead capability and transferring technical knowledge of its ballistic missiles. They also reinstate an arms embargo.

Iran’s president, Masoud Pezeshkian, called the sanctions “unjust and illegal.”

“They want to topple us,” he said in a briefing with reporters Friday in New York. “If you were in our place what would you do?”

Iran has not said how or whether it would retaliate for the new sanctions. Pezeshkian said that a decision would be made after he returned to Iran and conferred with other officials. On Saturday, Iran’s Foreign Ministry recalled its ambassadors from France, Britain and Germany to Tehran for consultations.

Hard-line factions in Iran have called for the country to retaliate by withdrawing from the Nuclear Nonproliferation Treaty, a move that would raise alarm because it would remove guardrails on Iran’s commitments under the treaty. Pezeshkian, a moderate, dismissed such talk, saying it was not an option.

The sanctions hit Iran at a particularly difficult time.

The country is still reeling from an intense, 12-day war with Israel in June, which ended after the United States dropped bunker-buster bombs that damaged three of Iran’s nuclear facilities. For months, the Iranian government has also grappled with an acute energy and water crisis, leading to mandatory cuts in power and water supplies in many cities.

The U.N. sanctions “may not have the same financial impact as the U.S. measures currently in place,” said Naysan Rafati, senior Iran analyst for the International Crisis Group, “but they compound the already significant strain on Iran’s economy.”

The 2015 deal to curb Iran’s nuclear program relieved the country from U.N. sanctions that had been passed by the Security Council between 2006 and 2010. But the 2015 agreement allowed those sanctions to be reimposed, using the so-called snapback mechanism, if Iran violated the terms of the deal by the end of October 2025.

If the deadline passed with no action, the provision would automatically expire and the sanctions would lapse. But in August, France, Britain and Germany triggered the mechanism and moved the deadline up to Sept. 28.

Europe has accused Tehran of violating the terms of the 2015 agreement by accelerating its nuclear enrichment to 60% from 3.5% and accumulating a stockpile of 400 kilograms of highly enriched uranium, which would allow Iran to build several nuclear bombs if it chose to weaponize its program, and not allowing international inspectors following the airstrikes.

Iranian officials maintain that the country’s nuclear program is for peaceful purposes. They say they accelerated enrichment only because the United States unilaterally exited the nuclear accord in 2018 under President Donald Trump, who called it “a horrible one-sided deal,” even though Iran was in full compliance and reimposed sanctions. To comply with the American sanctions, the Europeans ended trade with Iran. Iranian officials say that by doing so, European powers effectively violated their end of the deal.

In the briefing, Pezeshkian said again that Iran did not plan to pursue a nuclear weapon and expressed surprise that the world did not believe it. He also said Iran would not simply do whatever U.S. and European powers demanded without complaint. “We will not accept this,” he said.

The Europeans have also criticized Tehran’s decision, following the Israeli and American strikes, to suspend cooperation with the International Atomic and Energy Agency by denying its inspectors access to Iran’s nuclear sites.

Europe had laid out three conditions for Iran to avoid the new sanctions: to provide immediate access for the outside inspectors; to give the location of the 400-kilogram stockpile of highly enriched uranium; and to open direct nuclear negotiations with the United States.

Pezeshkian said that Iran was ready to cooperate with the Europeans, “whether it’s with the international atomic agency, or about the stockpile of enriched uranium and the inspectors to come and investigate.”

He said in the briefing and in comments to Iranian media Saturday that Iran had conceded to negotiations and to giving access to inspectors. But he said the United States had demanded that Iran turn out all of its 400-kilogram stockpile in exchange for a three-month suspension of snapback sanctions, a condition that Pezeshkian called unreasonable.

Russia and China, Iran’s two main allies and permanent members of the Security Council, tried Friday to delay the sanctions by six months, pushing the deadline to April. But the measure was defeated, with nine countries opposed, including Britain, France and the United States.

Russia and China have already said they do not consider the snapback measure legitimate and are likely to soften the effects of the sanctions by continuing their trade with Iran. Russia and Iran have close military ties, with Iran selling Russia drones it uses in the war in Ukraine.

China and Iran also have strong economic ties. China is the main client for Iran’s oil sales, purchasing crude oil at a discount of around 20%, helping the government stay economically afloat.

Some political figures in Iran have downplayed the impact of the sanctions, saying the country was already managing under the current sanctions and would find ways to cope with the new ones. They also sought to place the blame on the West, saying that Europe and the U.S. were never seriously interested in reaching a diplomatic agreement.

“They have made their decision, now we must make our decision, too,” Mahdi Mohammadi, a conservative senior adviser to the head of Iran’s parliament, said in a social media post. “The only way is to become strong to a level that erases the idea of Iran surrendering to the enemy.”

Nevertheless, Iran’s economy has tanked in recent years, suffering not just from the American sanctions but from chronic mismanagement and corruption. On Saturday, Iran’s markets quickly reacted to the news of the new sanctions, with the rial dropping 4% Saturday to a microscopic 1,126,000 to the dollar in the black market, which is the commonly accepted rate and the marker for inflation.

For ordinary Iranians, the news hit hard. They are already struggling with inflation of over 40%, rising unemployment and uncertainty about the direction of the country. Many fear the return of war with Israel and the U.S., as the government’s showdown with the West continues.