Iran can withstand ...
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Oil and petroleum products are among Iran’s main sources of foreign exchange. What can Iran do to reduce the impact of restrictions and strengthen economic resilience?
The first priority is to protect oil export capacity, but Iran should not treat oil as the only answer. It needs to preserve existing customers, find additional buyers in Asia and build more stable commercial relationships. At the same time, more crude can be processed into refined and petrochemical products where viable. This can create value and give Iran more flexibility when crude exports face restrictions.
But the current pressure is also hurting domestic production. If maritime restrictions make it harder to bring in machinery, spare parts, raw materials and intermediate goods, factories can face shortages and higher costs. Iran needs to keep alternative trade routes open and prioritize foreign currency for essential production inputs.
Another problem is that a sharp disruption in oil exports means fewer foreign-currency resources are available to the government and the economy. That makes it harder to stabilize the exchange rate and control inflation. Domestic policy therefore matters more when external revenues fall. The government needs to avoid policies that add pressure on prices, improve foreign-currency allocation and give businesses clearer rules for importing inputs.
Energy efficiency also deserves attention. Iran consumes large amounts of oil and gas domestically, and reducing waste could free more energy products for export without requiring a major increase in production.
Iran should also develop sectors that can generate foreign currency outside hydrocarbons, including mining, agriculture, manufacturing, tourism, transport and digital services. None can replace oil quickly, but together they can reduce vulnerability.
Resilience means giving the economy more choices. If Iran has several export markets, several transport routes and a stronger domestic production base, sanctions become less capable of creating an economic shock. That requires disciplined monetary and fiscal policies, stronger investment and a business environment in which the private sector has enough confidence to keep producing and investing.