Against a backdrop of fresh U.S. military strikes on Iranian targets in early 2026, former President Donald Trump has ramped up pressure on Tehran, calling on congressional Republicans to attach new Iranian sanctions to a long-delayed bill targeting Russia for its invasion of Ukraine. This latest demand comes as Western sanctions on Iran, one of the broadest and longest-running embargo regimes in modern global history, have already reshaped Iran’s economy, political trajectory, and its standing on the world stage for decades.
As independent outlet Middle East Eye outlines in a comprehensive breakdown, the modern sanctions regime against Iran did not emerge overnight. Its roots stretch back to November 1979, just months after the Iranian Revolution ousted the Western-backed Shah. When Iranian students seized the U.S. Embassy in Tehran and held 52 American hostages for 444 days, Washington responded by freezing more than $8 billion in Iranian assets held by U.S. financial institutions. By April 1980, that initial freeze expanded into a full ban on all imports of Iranian goods and services to the U.S.
The 1981 Algiers Accords resolved the hostage crisis, leading to eased restrictions and the return of most frozen assets. But just three years later, Washington reimposed sweeping restrictions, slapping an arms embargo on Iran and formally designating the Islamic Republic a “state sponsor of terror.” That move followed the 1983 bombing of U.S. and French barracks in Beirut, which Washington blamed on Iran-backed Hezbollah, cementing a adversarial framework that would shape policy for decades.
Through the 1990s, sanctions expanded dramatically as global fears grew over Iran’s emerging nuclear program. In 1995, President Bill Clinton issued executive orders imposing a total ban on all U.S. trade and investment with Iran. The following year, Congress passed the Iran and Libya Sanctions Act, which introduced groundbreaking “secondary sanctions” that penalized foreign companies investing in Iran’s energy sector, effectively cutting Iran off from most of the global oil trade. While provisions targeting Libya were later scrapped, the act has been reauthorized repeatedly by Congress ever since.
By the mid-2000s, multilateral sanctions joined unilateral U.S. measures. The U.N. Security Council imposed its first set of restrictions on Iran in 2006, after the International Atomic Energy Agency referred Tehran to the body over its uncooperative uranium enrichment program. Through the 2010s, the Security Council expanded those measures, focusing on an arms embargo and asset freezes for individuals and firms tied to Iran’s nuclear work. Unlike U.S. sanctions, U.N. measures are legally binding on all member states, though Russia has repeatedly rejected key provisions. In 2008, the Western-backed Financial Action Task Force blacklisted Iran over alleged money laundering and terrorist financing ties, further isolating it from the global financial system; today, Iran remains one of only three countries on the FATF blacklist, alongside Myanmar and North Korea.
Pressure escalated further in 2012, when the SWIFT global banking network cut off Iranian financial institutions at Washington’s behest, deepening Iran’s financial isolation. That same year, the EU – then the largest buyer of Iranian oil – introduced its own oil embargo and asset freezes over nuclear concerns. The EU has since expanded sanctions to target Tehran over its 2022 and 2026 anti-government protests and its military support for Russia’s invasion of Ukraine.
The most significant breakthrough in the standoff came in 2015, when world powers reached the Joint Comprehensive Plan of Action (JCPOA), a landmark nuclear agreement between Iran, the U.S., UK, France, Germany, Russia, China, and the EU. The deal went into effect in January 2016, requiring Iran to cap its uranium enrichment activities and open all its nuclear facilities to rigorous international inspections in exchange for broad sanctions relief. The JCPOA unlocked tens of billions of dollars in frozen Iranian assets and allowed Iran to resume full oil exports, marking the most significant diplomatic normalization between Iran and the West in decades.
That progress unraveled just two and a half years later, when then-President Trump withdrew the U.S. from the JCPOA in May 2018 and reimposed all U.S. secondary sanctions. Trump argued the original agreement, negotiated by the Obama administration, still left Iran able to develop a nuclear weapon and would spark a regional nuclear arms race. Iran responded by gradually increasing its uranium enrichment beyond the JCPOA’s limits, eroding the core constraints of the deal.
In 2020, the U.S. attempted to trigger a JCPOA “snapback” mechanism to reimpose expired U.N. sanctions, but the move was widely rejected as unlawful by all other remaining JCPOA signatories, and U.N. sanctions were lifted as scheduled. The dynamic shifted again in August 2025, when France, Germany, and the UK reversed their position amid growing concerns over Iran’s expanding uranium stockpile, triggering the snapback to reimpose U.N. sanctions over the strong objections of China and Russia. The UK, now independent of EU policy after Brexit, imposed its own set of targeted sanctions in 2023, designating the powerful Iranian Revolutionary Guards Corps (IRGC) – a core institution of the Iranian state – for sanctions over alleged hostile activities globally.
For nearly half a century, sanctions have gutted Iran’s economy, even though the country holds one of the world’s largest reserves of oil and natural gas. Cut off from formal global energy markets, Iran now relies on a “shadow fleet” of aging tankers to sell discounted crude on the black market, with most shipments going to China. While international law technically exempts humanitarian goods like food and medicine from sanctions, most global banks and shipping firms avoid handling even these transactions due to steep compliance and legal risks, exacerbating shortages and pushing inflation to crippling levels. That economic pressure was a core driver of the widespread anti-government protests that shook Iran in January 2026.
Following the outbreak of open hostilities between the U.S., Israel, and Iran in late February 2026, sanctions have become the central bargaining chip in negotiations to end the conflict. In mid-June, the two sides signed a Memorandum of Understanding (MoU) that outlined a path to sanctions relief: the U.S. would terminate all unilateral and multilateral sanctions against Iran on a negotiated schedule and release billions in frozen Iranian assets held in banks around the world. Shortly after the deal, Iranian lead negotiator Mohammad Ghalibaf announced that an agreement had been reached to unlock $12 billion in frozen Iranian funds. Trump later confirmed the deal, but claimed the funds would only be released to buy food exclusively from U.S. farmers – a condition Tehran has rejected outright.
As part of the June MoU, Washington issued a 60-day waiver for Iranian oil exports, and Iran agreed to cap uranium enrichment and reopen the strategically vital Strait of Hormuz to commercial shipping. But the fragile agreement has already collapsed: after renewed hostilities broke out between the two sides, Trump declared the ceasefire “over,” canceled the oil sanctions waiver, reimposed a military blockade on Iranian ports to stop covert oil exports, and hit Tehran with a new round of restrictions.
Even if a new final peace deal is reached, lifting the full panoply of Western sanctions faces significant political and procedural hurdles. First, most U.S. sanctions are codified in congressional legislation, meaning they require approval from both the Senate and House of Representatives to be overturned – and many lawmakers in both parties have long held hawkish positions on Iran and have blocked previous sanction relief deals. Second, the IRGC’s designation as a terrorist organization by the U.S., EU, and UK means that even if broad sanctions are lifted, global businesses will still face severe legal barriers to trading with any entity tied to the group, which permeates almost every sector of Iran’s economy. Third, lifting U.N. sanctions requires approval from all five permanent members of the Security Council: while China and Russia have long supported ending sanctions, the U.S., UK, and France remain hesitant to fully roll back measures. For its part, the EU has signaled it is open to lifting nuclear-related sanctions if Iran verifiably curbs its enrichment program, but removing all EU sanctions requires unanimous approval from all 27 member states, and EU foreign policy chief Kaja Kallas has indicated that sanctions imposed over Iran’s human rights record will remain in place even after a nuclear deal.