New European Union sanctions against Iran tighten the country’s existing financial isolation, but the decisive factor remains U.S. restrictions and whether China and India comply with them. This was the assessment of Iran specialist Mikhail Borodkin in an interview about the measures imposed after Tehran refused to compromise on its nuclear program.
In his view, Iran has effectively returned to pariah-state status: even Western countries that had maintained ties are now pulling back. One of the first consequences was another sharp fall of the rial, with the exchange rate exceeding 1.1 million rials per dollar. The authorities have approved redenomination, but, the expert says, that does not remove the systemic causes of the crisis. At the same time, prosecutors have barred public statements describing sanctions as harmful.
Borodkin says structures linked to the IRGC profit from the restrictions. By some estimates, Iran sells $50-55 billion worth of oil annually by bypassing sanctions through networks of front companies, including in China. Part of that money returns to the economy, part is used for infrastructure projects under barter-style arrangements with China, and part, he says, goes to financing Tehran’s armed allies.
The expert also notes that several security and political factions compete inside Iran’s system, yet all of them are interested in preserving the current order. Against that backdrop, despite a weak economy, inflation and decaying infrastructure, Tehran is rebuilding facilities destroyed during the 12-day war with Israel and the United States and is showing no willingness to abandon its nuclear ambitions.
“We are dealing with a regime that is becoming less and less rational,” Borodkin said.
Speaking about the risk of another war with Israel, he said a renewed conflict could weaken the regime but would not by itself guarantee its collapse. In his view, a change of power would require long preparation, coordination and the organization of internal opposition forces, and no such capacity is currently visible.