By Rory Jones, Patricia Kowsmann and Thomas Grove
The U.S. has unleashed more than 1,000 sanctions on Iran over the last 18 months as part of its wider campaign to squeeze Tehran into submission.
Iran's ability to withstand those sanctions so far exposes a hard fact for Washington: Economic pressure has largely failed to cow rogue regimes, as they game out more ways to sidestep U.S. restrictions.
The White House deal signed this week with Iran to ease economic pressure in return for the free movement of shipping includes an offer to permanently lift sanctions on the country, if it agrees to steps such as dismantling its nuclear program.
Iran is keen for relief from U.S. sanctions, which have severely hurt its economy and triggered popular discontent that could threaten the regime's long-term survival.
Even so, Iran's government has found ways to keep generating billions of dollars in revenue, mainly by selling oil to China, despite U.S. sanctions, weakening Washington's leverage in the talks. Ultimately, the Trump White House was forced to physically blockade Iran's ports to stem its oil exports -- which earned Tehran an estimated $43 billion in 2024 -- and bring it to the negotiating table.
While Washington might still achieve its goals in Iran, analysts say Tehran still holds many of the cards -- including its control over the Strait of Hormuz -- and may be able to resist U.S. demands, especially as it rakes in more money from oil sales.
Iran's ability to navigate U.S. sanctions is mirrored elsewhere around the world. Washington has turned to sanctions more than ever in recent years to heap pressure on its adversaries, with annual new listings jumping from 880 in 2017 to over 3,000 in 2024, according to the U.S. Treasury.
Typically, those sanctions aim to cut off targets from the U.S. financial system, turning them into economic pariahs and threatening companies that dare to trade with them.
Yet North Korea continues to develop its nuclear program, and the regime is wealthier than ever. Russia's economy has suffered greatly since its war with Ukraine, but Russian President Vladimir Putin still pursues the conflict. In Venezuela, Nicolás Maduro survived sanctions for a decade, and was only removed when U.S. forces physically dragged him from power.
Myanmar, another sanctioned nation, is still run by a military junta. Cuba's government is hanging on despite sanctions, though it has shown willingness to negotiate with Washington as foreign businesses flee.
Everyday citizens have borne most of the brunt of sanctions in these countries, while their governments resist change.
The Trump administration acknowledges the system requires some rethinking. It slowed the overall pace of sanctions designations last year, even as it has intensified penalties against Tehran.
The most effective actions are aggressive and targeted, with defined timelines, Treasury Secretary Scott Bessent said in a May speech.
"We are reviewing outdated and obsolete designations," he said. "Sanctions should not linger so long that their intended effects create unintended consequences."
In Iran's case, U.S. officials say sanctions have caused significant economic costs and played a role in forcing Tehran to the bargaining table. The Trump administration has targeted ships moving oil for Iran, its weapons procurement networks and the regime's access to cryptocurrency and shell companies that move dollars through the global financial system.
"These actions disrupted tens of billions of dollars in revenue that would be used to fund terrorism," a spokesperson for the Treasury said.
Other supporters of sanctions say they are just one tool available to the U.S. government, alongside diplomatic and military pressure.
But critics of the latest Iran deal, including many hawkish Republicans, say Tehran is getting too many concessions from the U.S. -- including temporary waivers on sanctions to let it sell more oil -- without achieving some war aims.
For some former U.S. officials and economic experts, Washington's failure to change regimes' behavior in places such as Iran lies in execution, not the sanctions themselves.
With Iran, "the sanctions themselves were not soft," said Avi Vishnevitz, a senior research fellow at the Center for Research of Terror Financing, a U.S.-based think tank. "What proved too soft was their implementation and their enforcement."
Evasive tactics
Iran, Russia and North Korea have all built elaborate apparatuses to skirt financial blockades. They use shell companies and middlemen in China, the United Arab Emirates and Turkey to continue exporting and importing essential goods for their economies, according to Treasury officials.
In 2024, U.S. authorities blacklisted an Iranian businessman named Ramin Jalalian who they said set up front companies in Hong Kong and the U.A.E. that moved $30 million, including payments for sanctioned Iranian oil, using proceeds to buy supplies for Iran.
Jalalian, one in a long list of alleged money launderers helping the regime, continues to operate through new front companies, the Treasury said late last year. Efforts to reach him were unsuccessful.
North Korea steals crypto to generate funds for the regime, and deploys its own bankers globally to launder ill-gotten gains, U.S. officials say.
The country made more than $6 billion in recent years from stealing cryptocurrencies, according to analytics firm Chainalysis, helping transform Pyongyang into a 21st-century city with electric vehicles and a construction boom.
Beijing's financial system and its currency, the yuan, also have become central to efforts by Iran and Russia to evade U.S. sanctions. China is Iran's biggest oil client, and Chinese banks are crucial in moving proceeds from the sales to Iranian front companies to buy goods and services in China, Western officials say.
But Western countries have been hesitant to punish China for its role, since doing so could disrupt important trade with China and infuriate Beijing.
No Chinese bank has been sanctioned by the U.S. for facilitating payments for Russia, the bipartisan U.S.-China Economic and Security Review Commission said in a November report to Congress. Last year, the European Union sanctioned two small regional lenders for the first time.
"Are we serious about enforcing these sanctions or not?" said Elaine Dezenski, a former senior Department of Homeland Security official now at the Foundation for Defense of Democracies, a Washington think tank. Failing to more rigorously enforce sanctions, and penalize jurisdictions helping evade U.S. power, gives regimes time to find solutions, she said. "Once those alternatives are in place, we lose the leverage."
Leaving loopholes
Some sanctions are subject to loopholes by design. Sanctions against Russia in the wake of its war in Ukraine allowed for some sales of Russian energy, particularly to Europe.
While sanctions on Russian crude have been expanded under the Trump administration, the war with Iran and the subsequent increase in oil prices forced President Trump to pull them back since March. Economic analysts say those measures provided an additional $2.4 billion for Russia in May alone.
To be sure, the U.K. government estimates that global sanctions have deprived Russia of at least $450 billion. Its economy is expected to grow a modest 1% this year, and domestic pressure on Putin appears to be growing.
But Russia has found workarounds, in particular through undeclared trade that moves through Armenia, Azerbaijan and Kazakhstan to help feed the country's military industry and bring in iPhones, Mercedes cars and luxury goods.
Technological advancements are also making sanctions harder to enforce. Cryptocurrencies are increasingly used to launder money through exchanges that operate outside the U.S. banking system.
Sanctions haven't always failed to achieve their goals. In the 1980s, global measures including a U.S. ban on investments and loans to the white-minority government in South Africa hurt the regime and helped force an end to apartheid.
Obama administration penalties on Iran's banking sector helped force its leadership to negotiate a nuclear deal that was later scrapped by the first Trump administration. Since then, Iran has successfully created a system of oil sales to China that has helped blunt U.S. sanctions, according to researchers.
Max Meizlish, a former sanctions enforcement officer in the U.S. Treasury, said he fears that because regimes are successfully evading sanctions, people will increasingly view them as impotent.
"That's just the wrong lesson to learn," he said. "The tool itself is just a tool. You wouldn't say that a gun just doesn't work; you would ask about how you're actually using it."
Write to Rory Jones at Rory.Jones@wsj.com, Patricia Kowsmann at patricia.kowsmann@wsj.com and Thomas Grove at thomas.grove@wsj.com
(END) Dow Jones Newswires
June 20, 2026 21:00 ET (01:00 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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